Have You Heard of the KiwiSaver HomeStart Grant?

Every penny counts when buying your first home! There are many options for financing your purchase; some including, your own savings, your KiwiSaver, and the KiwiSaver HomeStart grant.

You can get the HomeStart grant from Housing New Zealand if you fulfil the eligibility requirements:

• You are buying your first home
• You have been contributing the minimum amount to a KiwiSaver scheme for at least 3 years
• You meet the income cap thresholds
• You have a 10% deposit available (which can include KiwiSaver withdrawals, the KiwiSaver HomeStart grant and savings)
• The purchase price of the property is within the regional house price cap (as of April 2019 this is $500,000 for existing properties and $550,000 for new in Wellington and surrounding areas).

You can use the grant to purchase a Fee Simple, Cross Lease or Unit Title property but not a company shared apartment. You can only utilise a grant once.

The grant is not a set amount but is proportional to how long you have been contributing to KiwiSaver and dependant on if you’re purchasing a new or existing home. Currently, the grant amounts are:

• Existing/older home:

$1,000 for each year of contribution to the scheme. So if you have been contributing for 3 years, you can get $3,000, 4 years is $4,000 and 5 years equals $5,000.

• Purchasing/building a new home or a property bought off the plans:

$2,000 for each year you’ve contributed to your KiwiSaver Scheme. The grant amounts available are also proportionate to how long you have been contributing to your KiwiSaver at $6,000, $8,000 & $10,000 for 3, 4 or 5 years respectively

What Counts as a New Home?
If your home received its Code of Compliance Certificate less than six months before you submit your application for a grant, then it is considered a new home. The certificate must relate to the home as a whole and not only some building work. Relocating an existing/older home onto a section is not classified as a new home.

It’s important to note that if you’re buying a section and building your new home on it, you have to apply and put the grant towards the purchase of the land.

Other Conditions:
If you’re buying an existing home, you need to live there for a minimum of six months from the settlement date. If you use the grant to purchase land to build a house on, you need to live in that house for a minimum of six months from the issue of the Code of Compliance Certificate. If you move out before the relevant six month period ends, you may be required to pay the grant back with interest.
If you’re purchasing a property with someone else, that person does not need to be eligible for the grant for you to receive it. However, if they are, you can each apply for the grant. This applies to multiple people purchasing a home together, but no more than $10,000 worth of grants will be paid for the purchase of an existing/older property and no more than $20,000 for a new home or for the purchase of land on which a home will be built.

Looking to purchase your first home or know someone who is? Wakefields Lawyers Property Team can help you navigate the path to your new front door. We’ll help you figure out if you are eligible for the HomeStart grant and work with you to complete the application. Get in touch today on 04 970 3600 or info@wakefieldslaw.com to find out more!