Recent changes to the Kainga Ora KiwiSaver First Home Grant

Kainga Ora has announced new changes to its First Home Grant scheme. The Grant provides a cash sum of up to $10,000 for people wishing to purchase a property who have been contributing to their KiwiSaver for at least 3 years.

The changes which have come into effect recently are:

•   House price caps have increased;
•   The minimum contribution to KiwiSaver to access the grant has been reduced;
•   A new income cap category of $150,000 for individual buyers with dependents has been introduced;
•   Homes which are relocatable and have received a Code Compliance Certificate can be regarded as new properties, which increases the grant amount for applicants; and
•   Members of eligible Progressive Home Ownership rent-to-buy schemes can access the new build grant.

We provide below a summary of the Grant more generally.

Who can apply for the Grant?

You can apply for the Grant if you:

•   Are over 18;
•   have earned less than the income caps in the last 12 months;
•   do not currently own any property (with the exception of Maori land ownership);
•   have been contributing at least 3% or $1,000 (whichever is lower) annually to KiwiSaver or an eligible superannuation fund for at least 3 years (this does not have to be consecutive);
•   have purchased a property within the regional price caps; and
•   agree to live in the house for at least 6 months after settlement.

What are the income caps?

In order to receive the grant, one of the criteria, as above, is that you earn less than the income caps.  The income caps are:

• $95,000 or less before tax for an individual buyer
  $150,000 or less before tax for an individual buyer with one or more dependents
  $150,000 or less before tax for 2 or more buyers regardless of the number of dependents

What are the deposit requirements?

You must prove that you have a deposit of at least 5% of the purchase price of the property you wish to buy or build. This can include your KiwiSaver first home withdrawal, your First-Home Grant approval or pre-approval, your savings in the bank, the amount you have already paid towards the property, and money gifted by a close family member.

What if I have previously owned property?

You can apply if you are a previous home owner either in New Zealand or overseas provided that:

•   You have not received the First Home Grant or its predecessors such as the KiwiSaver HomeStart Grant or KiwiSaver deposit and
•   You do not own “realisable assets” worth more than 20% of the house price cap in the relevant area.

Realisable assets include:

•   Money in a bank account including term deposits and fixed deposits;
•   Shares, stocks, or bonds;
•   Investments in any banks or financial institutions;
•   Building society shares;
•   Boats or caravans valued at over $5,000;
•   Vehicles which are not your usual mode of transport e.g. a classic motorbike or car;
•   Other individual assets valued over $5,000; and
•   Deposit funds sent to a real estate agent.

Funds held in your KiwiSaver do not count as a realisable asset.

If you are unsure about whether you meet the requirements, it pays to get in touch with a legal professional who can guide you through the KiwiSaver First Home Grant process.