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First home buyers can often get tangled up in the pile of new concepts to learn.  In this article, we explore the basics of withdrawing your KiwiSaver and meeting the criteria for the Housing NZ First Home Grant (previously known as the HomeStart Grant).

KiwiSaver

Let’s start with KiwiSaver because it is a relatively simple concept.  If you have been contributing for 3 years to your KiwiSaver account and have never owned a house before, you are probably able to withdraw all of your money (except the $1,000 you may have received from the government when you started).

There are exceptions – if you’ve previously owned a house, for example – but the large majority of first home buyers fall into this category… more than 3 years… first home… you’re eligible.

First Home Grant

Notice that there is no maximum income or purchase price for a KiwiSaver withdrawal.  These limits only apply to the First Home Grant.  This grant was setup to help boost first home buyers into the market by giving them extra money to put towards their deposit.

Maximum Purchase Price for First Home Grant

The maximum purchase price differs depending on whether you’re buying an existing property or a new property.  A new property is defined as having the Code of Compliance issued within the last 6 months.  Here is a link to the criteria with Housing NZ but the summary is:

  • Auckland – $600k existing house, $650k new house
  • Other major towns and districts – $500k existing house, $550k new house
  • Rest of NZ – $400k existing house, $450k new house

Maximum Income for First Home Grant

The income criteria is relatively simple to figure out.

  • If you are buying by yourself, the maximum you can have earned in the past 12 months is $85,000
  • If you are buying as a couple (or more), the combined maximum you can have earned in the past 12 months is $130,000

So a couple earning $130,000 (combined), buying an existing house in Auckland for $600,000 is eligible for the Housing NZ Grant. Any higher on either of those, and they are only eligible to withdraw their KiwiSaver.

How much can you receive through the First Home Grant?

If you meet the income and purchase criteria and are buying an existing home:

for every year you have been in KiwiSaver, you will receive $1,000 First Home Grant, up to a maximum of $5,000.

So if a couple have both been in KiwiSaver for 5 years each or more, they will receive a total of $10,000 ($5,000 each).

If they have both been in KiwiSaver for 3 years each they will receive $6,000 ($3,000 each).

If you meet the income and purchase criteria and are buying a new home:

The amount doubles if you are purchasing a new home.  So $2,000 per year in KiwiSaver (to a maximum of $10,000).

So if a couple have both been in KiwiSaver for 5 years each or more and are purchasing a new home, they will receive a total of $20,000 ($10,000 each).  If they have both been in KiwiSaver for 3 years each they will receive $12,000 ($6,000 each).

 

Summary of KiwiSaver and First Home Grants:

  • No matter what you are purchasing or how much you earn, you are entitled to withdraw your KiwiSaver if you have been contributing for a minimum of 3 years and this is your first home
  • If you are purchasing below the area threshold ($400,000 – $650,000) and earn below the income threshold ($85,000 – $130,000) you may be entitled to some additional money.  This is called the First Home Grant and is provided by Housing NZ.

It can be a confusing process.  We’re always happy to help with any questions . You can contact us here.

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