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First Step on the Property Ladder?

This article was written by Sue Golds.

White picket fence and red front door – you’ve probably heard it all before, but is this your dream home?  Your dream could be reality if you are a first time buyer and a KiwiSaver.  

Did you know that you might be eligible for a payment (referred to as a Grant) from the Government under the HomeStart grant arrangement?  

HomeStart is operated by Housing New Zealand and provided you have made regular contributions to your KiwiSaver scheme of at least the minimum allowable percentage of your total income (currently 3%) you could benefit from further funds.  To qualify you 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 $80,000.00 for singles and $120,000.00 for couples in order to apply.   In addition you must intend to purchase a property in your personal names as opposed to a family trust or other shared fund.  

For the purchase of an existing home, the Grant payment  is $1,000.00 for each year of your contribution to a KiwiSaver scheme up to a maximum of $5,000.00 for each person applying.   For the purchase of a new home, or property bought off the plans, or land to build a new home on, the Grant payment is $2,000.00 for each year of your contribution to a KiwiSaver scheme up to a maximum of $10,000.00.  

Important considerations for first home buyers are regional caps set on purchase prices which vary by region to reflect property values.  When buying land only, you need to add a fixed building contract price to a land price in order to work out whether the total price is within the cap for that particular region.   Regional limits for Christchurch, Selwyn and Waimakariri are currently $450,000.00.  

HomeStart grants can only be used to pay for the property on settlement of the purchase, so it is important to consider all the requirements of the application within the stated time-frames in order to ensure funds are available.   Any funds received from HomeStart after the date of settlement have to be returned to Housing New Zealand.  If you live the in the house you have bought for a minimum of six months from the date of settlement, or if you use the Grant to purchase land to build a house on, and live in that house for a minimum of six months from the date of issue of the Code Compliance Certificate, then the HomeStart Grant does not need to be repaid.  If you move out before the relevant six month period ends, you may be required to repay the Grant with interest.  

Check out the handy HomeStart grant website on www.kiwisaver-homestart.co.nz/calculator to find out if you are eligible for  a Grant payment and give us a call to discuss further. 



The information contained in this site is provided for informational purposes only, and should not be construed as legal advice on any subject matter.




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