When KiwiSaver was launched, one of the key features negotiated was the ability to withdraw your savings and your employers contributions for the deposit on your first home.
At the same time, it was announced that first home buyers that had been contributing to KiwiSaver for 3 years or more would be entitled to apply for a First Home Buyers Grant (with eligibility conditions associated.) This meant that couple who were eligible (based on the value of house they were purchasing and their income) who had each been contributing to KiwiSaver for 5 years could receive a Grant of $10,000 from the NZ Government towards their house purchase.
At Moneyworks we have worked with a number of clients to take advantage of these two ways in which KiwiSaver can assist them to get into their first home.
Over time, eligibility for some 'second chance' house owners has been developed.
Enhanced Opportunities for KiwiSaver members
From the 1st April 2015, these benefits have been further enhanced.
More funds can be withdrawn: A KiwiSaver member can now withdraw the following from their KiwiSaver account towards the purchase of their first (or second chance) home:
- Their personal contributions
- Their employer contributions
- Government Member Tax Credits
- Earning on these three categories.
- The only thing that cannot be withdrawn is the $1,000 kickstart payment and associated earnings.
Additional Grants for New Home Buyers: From 1st April, if a KiwiSaver member is eligible for a KiwiSaver HomeStart Grant and they are purchasing a new home, the Grant is doubled. Instead of getting $5,000 per person ($1,000 for each year of KiwiSaver membership to a maximum of 5 years), the member can now get $10,000 ($2,000 for each year). This means that if a couple has been contributing to KiwiSaver for 5 years and they meet the eligibility criteria, they could get $20,000 towards their new house.
Changes to the eligibility criteria: The threshold criteria have been increased, to assist more people with eligibility. Here are the main eligibility conditions:
KiwiSaver deposit subsidy house price cap criteria
| $485,000 in Auckland |
| $425,000 in Wellington City and Queenstown Lakes |
| $400,000 in Christchurch City and Selwyn District |
| $350,000 in Thames/Coromandel, Hamilton City, Western Bay of Plenty, Tauranga City, Kapiti Coast , Porirua City, Hutt City, Upper Hutt, Tasman/Nelson, and Waimakariri |
| $300,000 in other regions |
If you are purchasing land to build a new home on, there is a maximum amount the combined land and new home can cost.
Check that you are eligible for the HomeStart grant:
- I am 18 years or over.
- I currently do not own a home or land.
- I have not received the HomeStart grant or previous KiwiSaver deposit subsidy before.
- I am a member of a KiwiSaver scheme, complying fund or exempt employer scheme (contact your scheme provider to check your scheme is eligible).
- I have contributed at least the minimum allowable percentage of my total income to a KiwiSaver scheme, complying fund or exempt employer scheme for at least three years. (From 1 April 2013 the minimum contribution was increased to 3 percent of your income, 3 percent of the minimum wage for non-earners or 3 percent of your yearly benefit for beneficiaries. From 1 July 2007 to 31 March 2009 the minimum contribution was 4 percent, and from 1 April 2009 to 31 March 2013 it was reduced to 2 percent.)
- I am the sole buyer and I have earned $80,000 or less (before tax) in the last 12 months.
- We are two or more buyers who have earned a combined income of $120,000 or less (before tax) in the last 12 months.
- I have a deposit that is 10 percent or more of the purchase price. (The 10 percent deposit includes the money you can withdraw through the KiwiSaver first-home withdrawal feature, the HomeStart grant amount you or the other purchasers may be eligible for and any other funds, such as savings, fixed and term deposits or funds already paid to a real estate agent or solicitor. The deposit can also be gifted by a relative with a KiwiSaver HomeStart Grant Gifting Declaration.) Note that the deposit cannot be borrowed or secured against other property, in order to qualify.
- I am buying one of the following types of property and land arrangements:
- fee simple
- stratum estate (freehold and leasehold)
- cross-lease (freehold and leasehold)
- leasehold
- multiple-owned Maori land.
For more information, talk to your adviser, solicitor and check out the official website.
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For more blog entries that you might be interested in:
KiwiSaver fees – how important are they really?
Overseas foreign superannuation and the IRD
By Carey Church
