18 March 2020
Add $10,000 to your deposit (with the Kiwisaver HomeStart grant)
Letoya Jackson, Solange Knowles, and the KiwiSaver HomeStart grant all have one thing in common – they tend to be lesser known than their well-loved and much hyped sibling.
If you’re trying to get onto the Waikato property market, but are wondering how you can optimise your deposit, we’re here to help. Join us, as we bring the Kiwisaver HomeStart grant into the spotlight, and what this first-home buyer grant can offer you.
The Kiwisaver HomeStart Grant
The year was 2015 when the NZ Government, recognising the new ‘bubble’ forming in the property market, introduced the Kiwisaver Home Start grant to help first-home buyers with their deposits.
Replacing the KiwiSaver First Home Deposit Subsidy, the grant was introduced to not only assist first-home buyers, but also encourage the younger generation to ‘opt in’ to KiwiSaver by making one of the eligibility clauses intertwined with the duration the scheme.
The grant, varies depending on the type of property being purchased and contributes to the final settlement price… meaning first-home buyers take out a smaller mortgage.
How does it inter-twine with KiwiSaver
The KiwiSaver HomeStart Grant is not administered by your KiwiSaver provider, KiwiSaver is merely a tool to encourage you to create your own savings.
The KiwiSaver HomeStart Grant money comes directly from the NZ Government, via Housing New Zealand. If you have had three full years of contributing the minimum income percentage to your KiwiSaver, you typically can apply for $3,000 - $5,000 for an existing property, or $6,000 - $10,000 for a new build, per person.
If purchasing an existing property, the grant can cover $1,000 per year for a maximum of five years. If you’re purchasing a new build, the grant is calculated at $2,000 per year, also up to a maximum of five years. And the best part? You can use more than one person grant to place into property, as long as you’re all planning o purchasing the property together.
Obtaining the KiwiSaver HomeStart Grant
Of course, a Government grant of this monetary value doesn’t come without its eligibility criteria. Other than needing to have been part of KiwiSaver for a minimum of three years, you also need to meet the following:
- be 18 years or over
- be purchasing or building your first home (or, meet the ‘Second Chance’ criteria)
- have a household income (before tax) of less than $85,000 per year (for one person), or less than $130,000 per year (for two or more people)
- have a deposit that is 5% or more of the purchase price, including the addition of the grant
- be planning to live in the house for at least 6 months from the settlement/completion of the property
But that’s not all. For our lovely Waikato residents, you’ll also need to abide by the price caps within Hamilton City and the outer regions, and the property criteria. This is key.
If you’re looking to buy within Hamilton City, you’re capped at $500,000 for an existing policy, or $550,000 for a new property. If you’re looking in the Waipa, or wider Waikato, you’re capped at $400,000. This is why first-home buyers are restricted to specific price brackets when looking at properties.
How can Lugtons help?
First-home buyers are important when it comes to their purchasing power. If you’re wanting general advice on properties that are within your price bracket, or who you can talk to about your deposit options, contact the team at Lugtons today. We love getting people into homes and understand the stepping stone the KiwiSaver HomeStart grant can provide.