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 prefer to get into the property market sooner than normally 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 schemes, collectively helping New Zealanders reach their dream of owning their own home.
While the First Home Loan scheme helps you with obtaining a mortgage with only a 5% deposit, the First Home Grant is one way to get funds to put toward your property purchase. And unlike a 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 3-5 years a sum of money to put towards their first home purchase. The amount you can get depends on the number of years you have contributed to Kiwisaver and if 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 for 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 $85,000 as an individual or $130,000 combined for a couple 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. For three years, you must have been making at least the minimum amount of Kiwisaver contributions or contributing to an exempt employer scheme or complying fund.
- House price caps and requirements. The property that you want to buy needs to meet certain property 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.
For previous homeowners
If you have previously owned a property, you can still be eligible for the First Home Grant if you meet the standard criteria, have not received the First Home Grant before, and you don’t have assets worth more than 20% of the house price cap.
Kiwisaver contributions and the grant
One of the main requirements for being eligible for the First Home Grant 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 ok.
However, your contributions need to be at least 3% of your annual income. This includes all your sources of income, and even if you have had a mix of automatic and voluntary contributions. Contributions of 3% also apply to those that are self-employed or on a benefit, and even non-earners must have been making contributions based on 3% of the minimum wage for a 40 hour workweek.
The First Home Grant can be used whether you are purchasing an existing property, a new build, buying land to build on, moving an existing home onto a new section, buying a property off the plans or building on Maori land. Each situation has its own criteria, but the most important thing to consider first is the house price caps.
A house price cap is the maximum value of home that you can purchase in order for you to be eligible for the grant. Depending on where you live in the country, the cap could be between $400,000 and $600,000 for existing homes, and between $500,000 and $650,000 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 what you qualify for.
You will 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’re approved, you can start searching for a house. Two weeks before the settlement date you’ll need to supply the sales and purchase agreement along with your evidence of a deposit. For new home builds, a building quote should be supplied and if applicable, your right to occupy Maori land.
If you don’t find a home within six months, you will need to start the application process again.
If you haven’t applied for pre-approval but have successfully made an offer on a new home, you can still apply for the First Home Grant. This must be done 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 deposit, you can complete the online application form.
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