HomeStart Grants - Who is eligible and what are the benefits for Kiwisavers?

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On April 1st, KiwiSaver HomeStart grants replaced the First Home deposit subsidy. What are the fundamentals of the new scheme and how will it affect decision-making for first home buyers?
Eligibility
In order to apply for the new HomeStart grant, you will need to have been a member of a KiwiSaver Scheme, complying fund or exempt employer scheme for at least three years. A salary limit is also imposed of $80,000 for singles and $120,000 for couples in order to apply. For more eligibility information including how asset values apply, visit Housing New Zealand’s eligibility calculator or its helpful eligibility calculator. In addition, first home buyers must intend to purchase a property in their personal name(s), rather than that of a family trust or other shared fund.

wade hansen west auckland lawyerOn April 1st 2015, KiwiSaver HomeStart grants replaced the First Home deposit subsidy. What are the fundamentals of the scheme and how will it affect decision-making for first home buyers?

Eligibility

In order to apply for the new HomeStart grant, you will need to have been a member of a KiwiSaver Scheme, complying fund or exempt employer scheme for at least three years. A salary limit is also imposed of $85,000 for singles and $130,000 for couples in order to apply. For more eligibility information including how asset values apply, visit Housing New Zealand’s eligibility checklist. In addition, first home buyers must intend to purchase a property in their personal name(s), rather than that of a family trust or other shared fund.

What the new HomeStart grant offers to first home buyers

For the purchase of an existing home, the new grant offers a maximum of $5,000 to individuals and $10,000 to couples. In the case of building or purchasing a brand new home, this doubles to $10,000 for individuals and $20,000 for couples.

What qualifies as a brand new home?

The HomeStart grant recognises a brand new home as any of the following:

  • A vacant residential section on which a new dwelling will be built
  • A house and land package purchased from plans
  • A new apartment built from plans
  • Any dwelling that has received its building code compliance certificate less than six months before the buyer’s application

Regional price caps for HomeStart grant purchases
An important consideration for first home buyers are new regional caps set on purchase prices, which vary by region to reflect property values. When buying land only, add a given building contract price to a land price to work out whether the total price is within the cap for that region. Regional limits are set out as follows: 

  • $600,000 (existing properties) and $650,000 (new builds) for Auckland
  • $500,000 (existing properties) and $550,000 (new builds) for Christchurch City, Hamilton City, Hutt City, Kapiti Coast, Nelson City, Porirua City, Queenstown Lakes, Selwyn District, Tasman, Tauranga City, Waimakariri, Wellington City, Western Bay of Plenty and Upper Hutt
  • $400,000 (existing properties) and $450,000 (new builds) for the rest of New Zealand

Extra tips for those who are:

...Looking to buy an existing property

A HomeStart grant must be paid directly to the vendor as part of the purchase price at settlement. If the grant does not process in time for settlement (it may take up to 10 working days), funds from another source such as a family loan may be used to settle, but the grant funds must be returned to Housing New Zealand as they cannot be used to repay a personal loan.

Additionally, a HomeStart grant cannot be used as part of a deposit to be paid to an agent - it can only be used at settlement.

...Looking to buy land to build a first home

With all applications, a copy of the fixed price building contract that includes the anticipated construction completion date must be included. A copy of the code compliance certificate must then be provided on or before the completion date.

...Looking to buy a property from the plans

Applicants will need to state a construction completion date in order to be considered - and to commence residing in the property from the settlement date where they must live for at least six months.

What are you waiting for? These changes are great news for first home buyers, providing a greater range of options to reflect the many home owning aspirations of young New Zealanders. Visit Housing New Zealand’s HomeStart grant website for everything you need to begin.

If you would like to discuss any matters related to buying and selling residential property, please contact Property Lawyer, Wade Hansen on 09 837 6845 or at wade.hansen@smithpartners.co.nz