Have you always dreamed of owning your own home, or buying land to build on, but thought you couldn’t afford it?
Well you might be able to turn that dream into a reality. You might be eligible to access one or all of three government home ownership products designed to help people on low or fixed incomes into their own homes.
By combining all three you may have a larger deposit and be able to finance your home purchase more easily.
The three products are:
• KiwiSaver first-home savings withdrawal
• KiwiSaver HomeStart grant
• Welcome Home Loans
If you've previously owned a home but no longer do so, you also may be eligible for the HomeStart grant, first-home savings
withdrawal and Welcome Home Loan.
After a minimum of 3 years membership of a KiwiSaver scheme, first home buyers can make a one-off withdrawal from their KiwiSaver and put this money towards a deposit for a first home. Anyone buying their first home may apply - the withdrawal is not means-tested. Even if you've owned a home previously, you might still be able to qualify if you're deemed to be in a similar financial position to a first-time buyer.
Following changes introduced on 1 April 2015, you can now withdraw all of your own and all of your employer's contributions plus your tax credits. You must leave at least $1,000 in your KiwiSaver Scheme account after the withdrawal, even if you have not received a $1,000 Kick-Start contribution.
You must intend to live in the property - it can't be used to buy an investment property.
For those not in KiwiSaver but a member of a complying fund, you may be able to withdraw your savings to help you buy your first home. Not all complying funds permit withdrawals for this purpose so you'll will need to discuss this with the trustees of your fund.
If you're a first-home buyer, give us a call on 03 470 1030 and we'll help you with this. Alternatively, you'll need to contact your KiwiSaver provider or complying fund provider to apply.
If you're a previous home owner, you'll still need to apply through your scheme provider, however Housing New Zealand will need to determine whether you meet the eligibility criteria. Call us on 03 470 1030 and we'll help you with this.
The withdrawal is administered by the KiwiSaver scheme providers or relevant complying fund managers and if approved the KiwiSaver funds will be transferred into your solicitor’s trust account prior to settlement to be used as part of the purchase price to the vendor on the settlement date. If the agreement is not completed then your solicitor will repay the funds back to your KiwiSaver provider to be reinvested into your KiwiSaver account.
Housing New Zealand is only involved in the savings withdrawal if you've previously owned a home or land. If you currently own a home or have a share in a property you won't be eligible for this feature.
The KiwiSaver HomeStart grant provides eligible first home buyers with a grant of up to $5,000 for individuals and up to $10,000 for couples to put towards a deposit for an existing home.
If you're purchasing a brand new home, a property off the plans or some land to build a first home on, the HomeStart grant is increased to a maximum of up to $10,000 for individuals and up to $20,000 for couples.
After three years of regularly contributing to KiwiSaver (of at least the minimum allowable percentage of your total income) you may be entitled to the HomeStart grant.
There is a maximum income cap of $80,000 for single borrowers or $120,000 for couples for eligibility for the grant. There is also a maximum house-price cap in place in each part of the country. This is currently $350,000 for Dunedin.
If you are purchasing an existing/older home, the HomeStart grant is $1,000 for each year of contribution to the scheme:
3 years of contributing = $3,000 (the minimum you can get)
4 years of contributing = $4,000
5 years of contributing = $5,000 (the maximum you can get).
If you're purchasing a new home, a property bought off the plans or land to build a new home on, the HomeStart grant is $2,000 for each year of contribution to the scheme:
3 years of contributing = $6,000 (the minimum you can get)
4 years of contributing = $8,000
5 years of contributing = $10,000 (the maximum you can get).
If you're purchasing land to build a new home on, there is a maximum amount the combined land and new home can cost.
More details can be found on the Housing NZ Corporation website: http://www.hnzc.co.nz/buying-a-house/KiwiSaver-helping-you-into-home-ownership/kiwisaver-homestart-grant.
(see our separate page that has the details of this)
Altus Financial Services
155 Princes St
P O Box 5939, Dunedin
Phone: 03 470 1030
Fax: 03 474 1760