Financial help for first home buyers

Saving towards a deposit and sorting out your mortgage are important first steps on your property journey.

Things can move quickly when buying a house, so it’s a good idea to have a pre-approved home loan before you start looking. Knowing how much you can borrow will help you search for properties in your price range.

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KiwiSaver

If you are a first home buyer you can withdraw KiwiSaver contributions made by you and your employer, returns on investments and government contributions (provided you leave a minimum balance of $1,000) to increase your deposit towards the land price.

KiwiSaver can not be used towards a build contract, only a land contract.
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To be eligible to withdraw some or all of your KiwiSaver you must:

• have been a KiwiSaver scheme member for at least three years;
• be planning to live in the house for at least six months,
• and be buying your first home.

​You can now withdraw funds from your KiwiSaver to put towards your initial deposit (previously this was only possible upon going unconditional). If you have a conditional sale and purchase agreement you can choose to make your withdrawal at the point of deposit or when you settle.

Contact your KiwiSaver provider regarding any entitlement before beginning the purchase process if you are purchasing a home for the first time.

If you are a previous home owner, you will still need to apply through your scheme provider; however Kāinga Ora will initially need to determine whether you are a qualifying person. If you are deemed to be in the same financial position as a first home buyer, the letter produced by Kāinga Ora will need to be forwarded to your KiwiSaver scheme provider, to assist with your application to withdraw your KiwiSaver contributions.

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​Find out more here - https://kaingaora.govt.nz/home-ownership/kiwisaver-first-home-withdrawal/

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First Home Grant

If you're a first-time home buyer, or a previous home owner and you've been making regular KiwiSaver contributions for 3 - 5 years, you may be eligible for a First Home Grant of up to $10,000.

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​You can apply for the grant through Kāinga Ora - Homes and Communities.
​Find out more here - https://kaingaora.govt.nz/

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To be eligible for the First Home Grant you must be:

• be over 18
• have earned less than the income caps in the last 12 months
• not currently own any property, this does not include ownership of Māori land
• have been contributing at least the minimum amount to KiwiSaver (or complying fund or exempt employer scheme) for 3 years or more
• purchase a property that is within the regional house price caps
• agree to live in your new house for at least 6 months.
• You must also make sure the house or land you want to buy meets the property requirements.

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Income Requirements:

In the 12 months before you apply, you must have earned:

• $95,000 or less before tax for a individual buyer
• $150,000 or less before tax for a individual buyer with one or more dependents
• $150,000 or less before tax for 2 or more buyers, regardless of the number of dependants

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KiwiSaver Requirements:

You must have been regularly contributing at least the minimum amount to KiwiSaver for 3 years.

• The minimum contribution is currently 3% of your total income or at least $1,000 annually (whichever is lower).
• The 3 years don't have to be consecutive, as long as they add up to 3 years' worth of contributions. For example, if you have been a KiwiSaver member for 3 years but took a 6 month savings suspension, you would not be eligible for the First Home Grant until you had contributed for another 6 months.
• Contributions must be made from all your sources of income, not just your main source of income.
• If you are a non-earner you need to make voluntary contributions of at least $1,000 per year, in each year that no income was earned.
• If you are self-employed or on a benefit and make voluntary contributions, you need to have made contributions at least once a year for 3 years of at least 3% of your annual income or at least $1,000 annually (whichever is lower).
• If you have made a combination of automatic and voluntary contributions, the total amount needs to be at least 3% of your total annual income or at least $1,000 annually (whichever is lower).

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Deposit Requirements:

You must provide evidence that you have a deposit of at least 5% of the purchase price of the house you want to buy or build.

This can include money:

• from your KiwiSaver first-home withdrawal
• from your First Home Grant approval/ pre-approval amount
• that you have saved in the bank
• you have already paid towards the property
• gifted by a close family member

If using gifted money, you'll need to supply a completed declaration.

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Regional House Caps:

House price caps have been increased across large parts of the country – bringing them in line with regional lower quartile house prices, after a period of bumper price growth across New Zealand’s housing market.

In Auckland, the new cap now sits at $875,000 for both existing properties and new builds, up from $625,000 and $700,000 respectively. Christchurch is now at $750,000 for a new build. And across other major centres, the new price caps are as follows:

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Property Requirements:

The property purchase price must be within the regional house price caps.

You must agree to live in your home for at least 6 months from:

• the date you buy your home (the settlement date), or
• the date the code compliance certificate for the house is issued, if it is a new build.

You must not currently own any land or property. This includes a property owned by a spouse or de facto partner that you could reasonably be expected to live in or sell. It does not include ownership of Māori land.

If you are buying a property with other people, you must be buying an equal share.

If you buy privately (not through a real estate agent), you may need to provide evidence that you have paid a fair market price, for example a registered valuation.

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How it Works

You can apply for either:

• A pre-approval before you start looking for a property to buy – this gives you certainty around eligibility and how much you may qualify for or;
• A grant approval if you've found a property and have a signed sale and purchase agreement.

If you buy a new home or land
If you buy a new home or land to build on, you can get $2,000 for each of the 3 (or more) years you've paid into the scheme. The most you can get is $10,000 for 5 or more years.

To find out more including eligibility and property criteria, as well as income and deposit visit - https://kaingaora.govt.nz/home-ownership/first-home-grant/check-you-are-eligible-for-first-home-grant/

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First Home Loan

Finding the deposit for your first home can be a struggle, with most lenders currently requiring a minimum 20% deposit. But with a First Home Loan you only need a 5% deposit which means getting into your first home is that much easier.

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​As well as having a 5% deposit, you need to meet certain criteria including an income cap. You will also need to meet the specific lending criteria of the participating lender you choose.

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The criteria are listed below along with an easy guide to check at a glance if you are eligible to apply: -

Previously, to be eligible, you had to (among other things) be looking at buying a house valued at less than those regional house prices caps we mentioned earlier.

But, as of Wednesday 1^st June, those caps will no longer apply, significantly increasing choice for eligible first home buyers.

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Income cap:

• Have an annual income of no more than $95,000 (before tax) for a individual buyer; or
• Have an income of no more than $150,000 (before tax) for a individual buyer who one or more dependents; or
• Have a combined income of no more than $150,000 (before tax) for two or more buyers, regardless of the number of dependents

Minimum deposit - You will need a minimum 5% of the purchase price of the house you are wishing to buy.

First home buyer - Or a previous home owner, in a similar financial position to a typical first home buyer.

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To find out more including eligibility and property criteria, as well as income and deposit visit - https://kaingaora.govt.nz/home-ownership/first-home-loan/check-you-are-eligible-for-first-home-loan/

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