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The First Home Grant
Cut down the cost of your new home with a grant of up to $10,000 for individuals who have been contributing to Kiwisaver
Kāinga Ora – Homes and Communities makes getting into your first home much easier, thanks to initiatives that benefit those on lower incomes, KiwiSaver contributors and people that would like to enter the property market sooner than typically possible. Previously known as the KiwiSaver HomeStart Grant, the First Home Grant is run by Kāinga Ora and sits alongside the KiwiSaver First-home Withdrawal and First Home Loan, collectively helping New Zealanders reach their dream of owning their own home.
While the First Home Loan helps you obtain a mortgage with only a 5% deposit, the First Home Grant is a way to obtain funds for your property purchase. However, unlike the loan, it doesn’t need to be paid back!
How does the First Home Grant work?
The First Home Grant gives eligible New Zealanders, who have been making KiwiSaver contributions for 3 or more years, a sum of money to put towards their first home purchase. The amount you receive depends on the number of years you have contributed to KiwiSaver and whether you are purchasing an existing or new home.
For individuals who want to purchase an existing home, you can get $1,000 for each year you have been making Kiwisaver contributions from a minimum of 3 years to a maximum of 5 years ($5,000). This figure doubles if you are buying a new home or land to build on, so you could get between $6,000 and $10,000. If you are a couple and you both meet the requirements, it’s possible to get up to $20,000 toward your first home.
You can either apply for pre-approval before you start searching for your home or grant approval if you have already signed a sales and purchase agreement. You could also consider applying for the First Home Loan scheme in conjunction with the First Home Grant.
The First Home Grant is also available to previous homeowners as long as they meet the eligibility criteria.
Am I eligible?
If you want to purchase your first home and take advantage of the First Home Grant, you must meet the following criteria:
- Age. Be at least 18 years of age
- Income. Your income must be no more than $95,000 as an individual or $150,000 for two or more buyers in the 12 months before applying.
- Deposit. Have a minimum deposit of 5% of the purchase price of the home you want to buy.
- KiwiSaver. You must have made at least the minimum amount of KiwiSaver contributions or contributed to an exempt employer scheme or a complying fund for three years.
- House price caps and requirements. The property you want to buy needs to meet certain criteria and be within the regional house price caps.
- Assets. You must not own another property.
- Living situation. Once you purchase your home, you are required to live in it for at least six months. In addition, if you are buying with others, you must own an equal share of the property.
For previous homeowners
If you have previously owned a property, you may still be eligible for the First Home Grant if you meet the standard criteria, have not received a grant before, and don’t have assets worth more than 20% of the house price cap.
KiwiSaver contributions and the grant
One of the main requirements for First Home Grant eligibility is that you have been making at least the minimum contribution to your KiwiSaver account for three years. These three years don’t need to be consecutive, so if you took a savings suspension for a few months but the time of your contributions adds up to three years, then that’s okay.
However, your contributions need to be at least 3% of your annual income, including all sources of income, even if you have had a mix of automatic and voluntary contributions. Contributions of 3% also apply to the self-employed or those on a benefit, and even non-earners must have been making contributions based on 3% of the minimum wage for a 40-hour week.
You can use The First Home Grant whether it is for:
- an existing property
- a new build
- buying land to build on,
- moving an existing home onto a new section,
- buying a property off plans
- building on Maori land.
Each situation has its own criteria, but the essential thing to consider is the house price cap.
The house price cap is the maximum value that you can purchase to be eligible for the grant. Depending on where you live in the country, the cap could be between $400,000 and $625,000 for existing homes and $500,000 and $700,000 for new homes. As to be expected with its soaring house prices, Auckland sits at the high end of the scale, whereas smaller towns and regional areas sit at the bottom end.
It’s important to review the criteria for each possible scenario as it differs between buying an existing home and building on land you are purchasing. You can find more specific information about the property criteria by visiting the Kāinga Ora – Homes and Communities website.
How do I apply?
There are two ways to apply for the First Home Grant: the first is pre-approval before you start looking for your new home, and the second is approval if you’ve already found a home and have had an offer accepted.
You can apply for pre-approval up to six months before you purchase a home, and this method is recommended by Kāinga Ora so that you can confirm your eligibility and qualification.
You need to fill in an application form on the Kāinga Ora website and attach electronic copies of your photo ID, KiwiSaver contribution statement, proof of income and payslips.
Once you receive approval, you can start searching for a house. Two weeks before the settlement date, you need to supply the sales and purchase agreement along with your evidence of a deposit (which needs to be at least 5%). In addition, you should supply a building quote for new home builds and, if applicable, your right to occupy Maori land.
If you don’t find a home within six months, you need to start the application process again.
If you haven’t applied for pre-approval but have successfully offered a new home, you can still apply for the First Home Grant. You must make the application at least four weeks before the settlement date, but it may be possible if the date is sooner.
Once you’ve gathered your photo ID, proof of income, payslips and KiwiSaver contribution statement, along with your sale and purchase agreement and evidence of a deposit, you can complete the online application form.
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