In an effort to ease the housing market pressures around the country, the Government has announced a series of long-term changes to help Kiwis buy their first home.
A key part of this announcement is the raising of property price caps in some areas and income caps to access First Home Grants and First Home Loans
Here are some key things to know.
As you may know, if you’re a first-time home buyer or a previous home owner, and you’ve been making regular KiwiSaver contributions for at least three years, you may be eligible for a First Home Grant of up to $10,000.
The amount depends on how many years you’ve paid into the scheme (a minimum of 3 years contributions at the applicable minimum contribution rate uis required), and whether you’re buying an existing home or a new property (with code of compliance issued less than 6 months before the purchase). In a nutshell:
– If you’re buying an existing home, you can get $1,000 for each year you’ve contributed to KiwiSaver, up to a maximum of $5,000.
– If you’re buying a new home or land, you can get $2,000 for each year you’ve contributed to KiwiSaver, up to a maximum of $10,000.
Importantly, to be eligible for a First Home Grant, your home also needs to be within the regional house price cap.
To factor in rising property prices, price caps have now been lifted in certain regions, effective 1 April 2021. Check out the table below for a ‘before and after’ overview of these changes:
Source: Te Tūāpapa Kura Kāinga
Income requirements for First Home Grants have also been lifted:
– single buyers can now access grants with an income of up to $95,000 (up from $85,000);
– two or more buyers can access grants with a combined income of up to $150,000 (up from $130,000).
Besides the new property price caps, here are other key changes announced by the Government in the property space.
– The same income and property price requirements apply to the Government’s First Home Loan scheme – click here to learn more.
– The Government has extended the bright-line test for investment properties from five years to 10 years.
– Investments in new developments are incentivised, to grow New Zealand’s housing supply. Plus, the Government is launching a $3.8 billion Housing Acceleration Fund, aimed at increasing the speed and scale of house building.
– Lastly, the Apprenticeship Boost payment is now extended until August 2022, to support building companies in taking on and keeping new apprentices.
To read more in-depth about the new changes, visit the Ministry of Housing and Urban Development website.
Get in touch – as financial advisers, we can help you make an informed decision about the timing and process of getting a mortgage, so that you have the full picture before you take the first big step towards your future.
Disclaimer: Please note that the content provided in this article is intended as an overview and as general information only. While care is taken to ensure accuracy and reliability, the information provided is subject to continuous change and may not reflect current development or address your situation. Before making any decisions based on the information provided in this article, please use your discretion and seek independent guidance.