Rent, Buy or Own
Buying your first home with KiwiSaver
KiwiSaver is a government-sponsored savings initiative to increase New Zealanders' level of savings and assets (including home ownership).
KiwiSaver has three features to help you buy, and pay for your home. Housing New Zealand administers one of them, the deposit subsidy.
Deposit subsidy
The first home deposit subsidy will be available from 1 July 2010 onwards, once members have belonged and contributed to KiwiSaver for three years.
Application process details will be available on the website before 1 July 2010.
The subsidy, is $1,000 for each year of contribution to the scheme, up to a maximum of $5,000 for five years for each member.
KiwiSaver deposit subsidy eligibility criteria and loan conditions
To be eligible for the first home deposit subsidy, you must meet all the following criteria and conditions:
- Be 18 years or over
- Be a member of a KiwiSaver scheme, or a complying superannuation fund
- Have contributed a minimum of two percent of your income to a KiwiSaver or complying superannuation fund for at least three years
- Be buying your first home (or have a determination from Housing New Zealand Corporation that you are in the same position as a first home buyer in terms of income, assets and liabilities)
- Be planning to live in the house for at least six months.
To make sure the deposit subsidy is used to buy a modestly-priced house, rather than an expensive one, regional house price caps will apply. These are based on the lower quartile house prices by Territorial Local Authority, and will be reviewed annually from June 2010 to ensure they reflect market fluctuations.
The regional house price caps for 2010 are $400,000 for the higher priced areas of Auckland City, North Shore City, Rodney, Wellington City and Queenstown Lakes District and $300,000 for all other areas.
What are the household income caps?
The household income caps are $100,000 for one or two borrowers or $140,000 for three or more borrowers.
Previous home owners
If you have previously owned a home, but no longer have a share in a property, you may also be eligible for the first home withdrawal and the deposit subsidy - as long as you:
- have not received either the first home withdrawal or the deposit subsidy before; and
- are in a similar position to first home buyers in terms of assets, income and liabilities.
This recognises that some people no longer own a home due to adverse circumstances such as redundancy, illness or relationship break-up, and therefore should not be excluded as 'first home buyers'.
Those who have previously owned a home will need to contact Housing New Zealand for a determination that they are in a similar position to first home buyers.
Mortgage diversion
The mortgage diversion facility was closed to all KiwiSaver members on 1 June 2009. Existing mortgage diversion participants can still have their contributions diverted if their provider continues to offer the facility.
First home withdrawal
After three years of KiwiSaver membership you may be able to withdraw all, or part, of your savings (not government contributions) to put towards buying your first home.
Applications for such withdrawals need to be made to your KiwiSaver provider.
Note that such withdrawals exclude the $1,000 government kick-start and member tax credit. Also, you must live at the property - savings cannot be used to purchase an investment property.
More information is available from www.kiwisaver.govt.nz
