May 29, 2022
This year's Budget has raised or eliminated the price caps for First Home Grants and First Home Loans to take into account recent very high rates of house price inflation and is also providing additional support to not-for-profit rental housing providers.
The house price caps on both new and existing homes has been removed entirely for the First Home Loan scheme, however income caps for borrowers would remain.
The existing house price caps vary by district, ranging from $400,000 to to $625,000 for existing properties and from $500,000 to $700,00 for new builds.
Those price caps will be removed entirely for First Home Loans from June 1.
House price caps will remain for the First Home Grant but are being increased substantially.
The current caps for the First Home Grant also range from $400,000 to $625,000 for existing properties, and will increase to $400,000 to $875,000 depending on location.
The First Home Grant price caps for new builds will be increased to between $500,000 and $925,000 depending on location (the table below shows the changes to the price caps in the main urban districts).
Housing Minister Megan Woods said funding would be available for approximately 7000 additional First Home Grants and 2500 additional First Home Loans annually.
The new price caps for the First home Grant take effect from 19 May.
Price caps were also being raised for the Kainga Whenua Loan scheme, which is available to people building, relocating or purchasing a home on whenua Maori.
The price cap for that scheme will be increased from $200,000 to $500,000 and will take effect from 1 June.
The Budget has also set aside $350 million for a new Affordable Housing Fund, which will assist affordable housing providers to build additional rental accommodation.
The first $50 million would be paid as grants to not-for-profit organisations to provide affordable rental housing in Auckland, Tauranga, Rotorua, Napier/Hastings, Wellington and Nelson/Tasman.
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