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You can now withdraw more from Kiwisaver for your first home

You can now withdraw more money for your first home

Recently confirmed changes to Kiwisaver which kick in on the 1st April 2015 will allow First Home Buyers to withdraw more money from their Kiwisaver funds than they were previously allowed to.

There are three changes which we think will most effect our clients.

1 - Withdrawing all but the $1000 kickstart from Kiwisaver

This is the main change for Kiwisaver withdrawal itself. In the past you could only withdraw the contributions that you and your employer had made to your Kiwisaver fund. From 1st April you will be able to withdraw the government contributions that they have made to your fund as well, except the $1000 kickstart that they gave you when you first started.We've looked at a few clients who have withdrawn Kiwisaver recently with funds around $10,000 and this would mean they would get between $1500 and $2500 more under the new rules than they currently stand to receive. That's got to be good!

‚Äč2 - An increase in the maximum purchase price cap for HomeStart Grant

The grant from the Government of between $3000 and $5000 toward your first home which was previously called the "Housing NZ Deposit Subsidy" is now going to be called the "Homestart Grant"There are income caps for this of $80K for an individual and $120K for 2 or more borrowers and there is a limit on the maximum purchase price that you can purchase for and still be eligible for this grant.The maximum purchase price has now been increased so that for regional centres you will still be eligible for the Homestart Grant if you purchase up to $350K. It's now $450K for the bigger centres and $550K for Auckland.

3 - Up to $10,000 per person Homestart Grant for a brand new home

Under the new policy you will be eligible for double the normal Homestart grant if your first home is a brand new house or land to build a brand new house on.

So if you've been in Kiwisaver for 5 years and eligible for the grant and buying a new home then you would receive $10,000. If there were two of you and you had $11,000 in your Kiwisaver each then you would have $40K total deposit to put towards a brand new home which would put you in a very good position, especially if you had some other savings and reasonable income.

It's worth noting that you have to have been in Kiwisaver for at least 3 years to be eligible to withdraw from your Kiwisaver fund and there are other conditions as well depending on your fund provider. The Homestart Advantage has some income caps and other rules which we can provide you further details on.

If you would like to discuss these changes and how they effect you as a First Home Buyer then feel free to get in touch with us at My Mortgage

Adam and the My Mortgage team


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