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).
Amounts are accurate as at 1st April 2021. Please consult Kainga Ora for exact numbers on your location.
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 for $1,000 which must remain in the account.
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.
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.
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 with the exact amounts for your area but a brief summary is:
The income criteria is relatively simple to figure out.
So a couple earning $150,000 (combined), buying an existing house in Auckland for $625,000 is eligible for the Housing NZ Grant. Any higher on either of those, and they are only eligible to withdraw their KiwiSaver.
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).
It can be a confusing process. We're always happy to help with any questions. You can contact us here.
... We’d love to get your vote for the People’s Choice Award at the Westpac Business Awards. Mortgage Lab is focused on helping our clients, supporting our people, educating Kiwis and being socially and environmentally responsible. So vote for Mortgage Lab. It’ll only take 15 seconds with no registration required. Pity votes and protest votes are welcome.
For many of us, the game Monopoly informs our earliest understanding of how investment property works. And so we are given to believe that it’s fairly straightforward to grow from…
Surrounding yourself with property experts is not just a good idea; it’s absolutely necessary. And while it sounds expensive, you don’t need to be rolling in cash. In fact, in…
When you think about mortgage broking (okay, you probably don’t think about mortgage broking but stay with us) you probably think about it in the context of buying a house.…