There can be some confusion around Kiwisaver and the Home Start Grant (First Home Grant from 2019), and what they each mean, along with their requirements. In this blog I'd like to clear those questions up for you and provide a little explanation around how each will help you purchase your first home.
Kiwisaver is the Government scheme which requires you to put away at least 3% of your wages for retirement. This fund builds up over time and you can withdraw these funds to purchase your first home, or when you reach 65, retirement age.
The criteria are pretty simple;
- You need to be in an approved Kiwisaver scheme for 3 years or more
- You need to be over 18
- You need to be a first home buyer or in the same position as a first home buyer
- You need to live in the property you buy for at least 12 months
To apply for withdrawal, you need to contact your provider, which could be a standard bank, or an investment company or a Kiwisaver specific scheme. This is simply call to let them know you'd like to apply to uplift these funds, and they'll send you a letter showing the balance you can withdraw.
First Home Grant (previously Home Start Grant)
The First Home Grant is money from Housing New Zealand to assist you with your deposit to purchase a property. You can receive between $3K - $5K for an existing property, and between $6K - $10K for new homes depending on how long you've been contributing to KiwiSaver. This money is non-repayable, but there are a few boxes to tick, so check out our guide for the criteria you'll need to meet alongside the KiwiSaver Criteria above;
- Earn under the income threshold of $85K for an individual or $130K for a couple.
- Be a permanent New Zealand Resident with no visa travel condition, or a NZ Citizen
- Have at least 5% deposit in total
- Meet the House Price caps for your region (see table below)
The First Home Grant is now all online, which makes it much easier to apply for. You'll need a couple of details in order to apply, including;
- Your IRD Tax Summaries for 2 years (log into MyIR here)
- Your KiwiSaver Summary to show you have been contributing to KiwiSaver for at least 3 years
- ID - Driver's licences or passport
- Payslips for each applicant
- Bank Statement, Gift Letter or KiwiSaver print out showing your remaining deposit funds up to at least 5% of the purchase price
If you apply for your KiwiSaver and the First Home Grant nice and early (i.e. gain pre-approval of both), it will save a huge amount of time when you actually have agreed on a property to buy - so I strongly recommend spending the time early on to ensure that's nice and easy for youS
The final stages of your KiwiSaver and First Home Grant withdrawal are actually facilitated by your lawyer, and we can help answer any questions as you go along.
So get in touch today and ask us how you can buy using KiwiSaver and the First Home grant.
We look forward to hearing from you!
Claire Martin, Adam Thompson and the My Mortgage Team.