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A hand up for First Home Buyers

While investors are grumbling about the changes to the deposit requirements for Rental Properties (me included) there was some good news this week for first home buyers as the availability of the Homestart Grant has been increased which we hope will open up opportunities for more first time buyers to get in to their first home!

So what is the HomeStart Grant?

Essentially this is free money from the Government! Homestart Grant is a grant given by Housing NZ to qualifying first home buyers in addition to their ability to withdraw funds from their Kiwisaver fund.

The provision here is for $1000 for each year you've been in Kiwisaver. You have to have been contributing to Kiwisaver for a minimum of 3 years and the maximum grant for purchasing an existing house is $5000.

So thats $3000 for 3 years, $4000 for 4 years and $5000 for 5 years. The beauty of this is that this grant is available to each qualifying person when you're buying a house jointly. So if that's you and your partner then you could both be eligible for up to $5000 each.

There is also the ability to double your grant if you are purchasing a brand new home that has not been lived in before and has been constructed for you.

That's great, how do the changes make this better?

Unlike Kiwisaver there are limits of the maximum amount you can earn and purchase a house for, to qualify for one of the grants as mentioned above. The good news is that these are changing.

Here is a video from the Government outlining these changes

The maximum income limit has been increased from $80K per annum to $85K for individuals and from $120K to $130K for couples.

The maximum purchase price has been increased also depending on the region you are in. These have been increased by $50K for an existing home and $100K for a new home. We've included a full table of the changes at the bottom of the page for reference in your area.

The great news with this is that it's going to make this grant accessible to much more people.

Take someone in a regional town like Te Awamutu or Matamata for example. If a couple had $15K each in their Kiwisaver funds and $5K savings this would provide them a 10% deposit - This is the minimum deposit for reasonable lending options. If they wanted to purchase at $360K they would not have enough deposit because they would not be eligible to the Homestart Grant under the old rules.

Under the new rules they would qualify for up to $5K Homestart Grant each so would easily have 10% deposit and could potentially keep their $5K cash deposit to make some improvements to the property and still have a 10% deposit for a purchase of $400K.

We've included a Factsheet on Kiwisaver Withdrawal below along with a brief guide to how we can help guide you through the process of buying your first home.

We're here to help you through the entire process of buying your first home including assisting with your application for Homestart Grant and Kiwisaver Withdrawal.

We'd like to discuss the options available for you and of course get you the best home loan for your first home. Click the contact us tab or send me an email directly using this link and we can get the ball rolling.

Adam Thompson, Claire Martin and the My Mortgage Team
Mortgage Advisers
Cambridge, Te Awamutu, Matamata, Hamilton and wherever you are in NZ


House price caps

Eligibility Criteria

Prior to 1 Aug 2016

All properties

From 1 Aug 2016

Existing/ older properties

From 1 Aug 2016

New properties

Auckland $550,000 $600,000 $650,000
Hamilton City, Tauranga City, Western Bay of Plenty District, Kapiti Coast District, Porirua City, Upper Hutt City, Hutt City, Wellington City, Tasman District, Nelson City, Waimakariri District, Christchurch City, Selwyn District, Queenstown Lakes District $450,000 $500,000 $550,000
Rest of New Zealand $350,000 $400,000 $450,000




Income caps (before tax)

Eligibility Criteria

Prior to 1 Aug 2016

All properties

From 1 Aug 2016

Existing/ older properties

From 1 Aug 2016

New properties

Individual buyer $80,000 or less in the previous 12 months $85,000 or less in the previous 12 months $85,000 or less in the previous 12 months
Two or more buyers $120,000 or less in the previous 12 months $130,000 or less in the previous 12 months $130,000 or less in the previous 12 months