Buying your first home is really exciting, but it can also be a bit overwhelming with all the information. In this blog post we will explore how you can use your KiwiSaver to purchase your first home and the HomeStart grant available for first-time buyers in New Zealand.
Which criteria do I need to meet to use my KiwiSaver?
Firstly, to be eligible to use your Kiwisaver savings to buy your first home, you must have been a KiwiSaver member for at least three years. You can withdraw your contributions, your employer’s contributions, and any government contributions, but not the investment returns. Remember, that you can only use your KiwiSaver if it’s your first home. If you have owned a home before, you are not eligible for this scheme.
The amount you can withdraw from your KiwiSaver will depend on how long you have been a member and the amount of contributions you have made. If you have been a member for three years or more, you can withdraw all your contributions, your employer’s contributions, and any government contributions. If you have been a member for less than three years, you can still withdraw your contributions and your employer’s contributions, but not the government contributions. Please also note that you need to leave at least 1,000 dollars in your KiwiSaver account.
It is also essential to note that the Kiwisaver withdrawal process can take several weeks to process. Therefore, it’s best to plan your home purchase well in advance and talk to your KiwiSaver provider about the process.
The HomeStart grant
Apart from using your KiwiSaver savings, you may also be eligible for the HomeStart grant. The HomeStart grant is a government scheme that provides financial assistance to first-time buyers to help them purchase their first home. The grant is available to eligible individuals or couples who meet the following criteria:
- You must be a first-time buyer, and you cannot have owned property before
- You must be a New Zealand citizen or a permanent resident
- You must have been contributing to KiwiSaver or another complying scheme for at least three years
- You must have a combined income of less than $95,000 per annum for an individual or $150,000 per annum for a couple
- The house you intend to buy must be in an area where the house price cap applies
The amount you can receive from the HomeStart grant will depend on your income, your Kiwisaver contributions, and the area you are buying the house. For example, if you are buying a property in Auckland, the house price cap is $600,000, and you may be eligible for up to $20,000 towards your deposit. In other regions, the house price cap may be lower, but the amount you can receive may also be lower.
To apply for the HomeStart grant, you will need to contact your KiwiSaver provider, who will guide you through the application process. You will need to provide proof of your income, your KiwiSaver contributions, and other supporting documents.
In summary, to use your Kiwisaver to buy your first home and to apply for the HomeStart grant, you need to meet certain eligibility criteria. You must have been a KiwiSaver member for at least three years and be a first-time buyer. You also need to provide proof of your income, your KiwiSaver contributions, and other supporting documents.
It’s essential to plan your home purchase well in advance and talk to your KiwiSaver provider about the process. The KiwiSaver withdrawal process can take several weeks to process, so it’s best to allow sufficient time for this.
Finally, purchasing your first home is an exciting milestone, and there are various schemes available to help you achieve this goal. Make sure you do your research and seek professional advice to ensure you make the best decisions for your financial future.
You are more than welcome to book a korero with us if you are buying your first home. We know all the ins and outs of the industry and can guide you through this process of purchasing your first home.
This is general financial advice. For tailored financial advice you need to book a meeting with us.