Thinking of making your first home a new one? Kiwisaver for First Home owners is here.

If you are ready to purchase your first home and wondered about building, the new government home buyers subsidy has just had a makeover for newly constructed homes.

There are two key Government initiatives to support Kiwi’s to buy their own home. HomeStart, the Governments’ new Kiwisaver grant, and Welcome Home Loans, a Housing New Zealand Corporation product.

These are two separate products however can be used together for purchasers who meet all of the criteria.

HomeStart – The KiwiSaver Scheme For First Home Buyers

HomeStart works by allowing eligible first home buyers (or second chance buyers) to  withdraw all of their KiwiSaver contributions including their individual contributions, their employer contributions and the government tax credits (50 cents for every dollar  up to $541.43 annually) to be used towards the deposit of a home purchase.

Under the HomeStart programme eligible individuals or couples may also receive a grant of up to $20,000 to build a new home.

The value of the grant is determined by the length of time purchasers have been a member of KiwiSaver and whether they are acting as individuals or couples.

mother and child

New House Build

Length of time in KS Single Grant Couple Grant
3 years $6,000 $12,000
4 years $8,000 $16,000
5 years $10,000 $20,000

Purchase of existing house

Length of time in KS Single Grant Couple Grant
3 years $3,000 $6,000
4 years $4,000 $8,000
5 years $5,000 $10,000

Eligibility Criteria

  • The cap on the purchase price of a house is $550k i.e purchase price of home and land cannot exceed $550k (Auckland only – this is different for other parts of the country)
  • There is an income cap (unchanged from previous scheme) of $80k for an individual or $120k for a couple purchasing a home.
  • You must have contributed to KiwiSaver for a minimum of three years and must not have previously received a KiwiSaver grant.

Second chance buyers:

People who have owned a home before may still be eligible to receive support however there are three key criteria.

  • Must have income less than the income cap.
  • Must have assets worth less than 20% of the house purchase price
  • Cannot have previously received a KiwiSaver grant or subsidy.

Conditions for new builds

  • Land must be purchased as a vacant residential section.
  • The new house must be built within 12 months of the land purchase being settled.
  • When purchasing a house and land package off the plan, a new house must be built within 12 months of the date on which the first home buyer entered into an agreement to purchase the house and land package.

Welcome Home Loan

The welcome home loan is a mortgage insurance scheme that is subsidised by the government. The Housing New Zealand Corporation product was introduced to assist low income people get into a home by underwriting their bank loan.
To qualify for a Welcome Home Loan first home buyers require a 10% (not the 20% currently required by major trading banks) deposit and must meet the income and purchase price caps to be eligible.