KiwiSaver and HomeStart Update
Recently, some of the KiwiSaver and HomeStart implications for first home buyers have come to my attention. After learning about it, I was amazed that young couples aren’t flooding the market looking to buy low-cost new build homes.
Most of you are not first home buyers, but some of you have children that are the right age or you may have friends whose kids are looking to get into the housing market.
I’ve included a link to the Kiwisaver Homestart page below, but here’s the lowdown as it was explained to me:
A first home buyer (or buyers) can apply to use their Kiwisaver as a deposit for a new home. They need to have been contributing to Kiwisaver for at least 3 years.
If they are buying a new-build home (up to 6 months old), they can apply for a homestart grant of $2,000 for each year they have been in Kiwisaver. This is capped at 5 years.
So, a young couple looking to buy their first home could use all their Kiwisaver contributions plus up to $10,000 each to get a deposit together. The deposit for a new build home via the welcome home loan scheme only needs to be 10%, not the 20% required in most other cases.
The last condition is that it only applies to a home worth $550,000 or less.
So, a new 2 bedroom home, priced at $400,000, only requires a $40,000 deposit. If that is being bought by a couple and they have both been in Kiwisaver for 5 years, the chances are they already have the deposit by combining their Kiwisaver savings plus the 2 Homestart grants. All their other savings are a bonus!
I’ve been telling everyone that this is the perfect time for young people to get into the housing market cheaply and easily. It’s not every day the government gives you free money!
If you would like to discuss this (or anything else) over a coffee, please give me a call and we’ll get together for a chat.