It’s not normal that we can expect free handouts from the government; but this is worth looking into.
The HomeStart Grant may allow first home buyers a grant of $5,000 -$10,000 to put towards buying an existing home or $10,000 - $20,000 for a new home.
There are two HomeStart grants:
1) For purchasing an existing house, the grant is worth $3,000 - $5,000 (based on $1,000 for each year you have been in KiwiSaver (KS))
2) For purchasing or building a new house, (or purchase land to build on), the grant may be doubled; $6,000 to $10,000 ($2,000 for each year you have been in KS).
To be eligible to meet the grant the following criteria must be meet:
1) Contributed the minimum amount to KS (3% from April 2013)
2) Be over 18 years old
3) or individuals, have income of less than $85k pa, or less than $130k pa for couples.
4) Have a deposit of 10% or more of the purchase price
5) The price of the house purchased must be <$500k for an existing house, of <$550k for a new home.
In addition to the HomeStart grant, you may also be able to withdraw your contributions from Kiwisaver.
How to use Kiwisaver for your first home purchase
You can also apply for KS First-Home Withdrawal, which allows you to withdraw all, or part, of your savings to put towards buying your first home. The criteria for this is:
1) You intend to live in the property
2) You have been in Kiwisaver for more than 3 years.
There may be further technical details (such as buying off the plans), and the timing of the application is important; it cannot be after you have purchased the house. Sometimes there can be a few hoops to jump through.
We work closely with several mortgage brokers in Cambridge and the greater Waikato who are experienced in applying for the HomeStart Grant along with withdrawing funds from Kiwisaver. If you would like us to put you in touch with a good match, please let us know. You can also read further from Housing New Zealand here and KiwiSaver here.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.