So, how to get First Home Grant? Buying your first home can be a daunting task ahead. So you’re now wanting to buy your first home and your deposit or part of the deposit is locked in with Kiwisaver. How do you withdraw it and get the First Home Grant?
For clarity, KiwiSaver First Home Withdrawal and First Home Grant (Previously known as Kiwisaver HomeStart Grant) through Kainga Ora are two different things. One is withdrawing your Kiwisaver, the other is receiving the grant.
What is the Kainga Ora First Home Grant?
The First Home Grant is to help first time homeowners buying property. It is a Government funded scheme. The grant is specifically designed for increasing your deposit and that amount varies between $3,000 to $10,000. The amount is dependent on location, time in Kiwisaver. I’ve helped many clients of mine who have used this scheme to purchase their first home.
So the first step getting the grant is that you must have Kiwisaver and have been contributing at least the minimum amount i.e. 3% towards your Kiwisaver scheme for a minimum of 3 years or more.
There is also some misconception that you must be contributing for 3 years consecutively. That is not the case, as long as the contributions are added up to a minimum for 3 years. For example, you have been with Kiwisaver for 3 years and take a 12 month break or go on an OE. You’ll still be eligible for an approved First Home Grant when you’ve made another 12 months of contributions.
How Do I Get The First Home Grant?
Getting the grant isn’t as easy as it seems, there are a number of hurdles and criterias you need to meet before they approve the First Home Grant.
Below is the eligibility criteria
- The purchaser is over 18 years old
- Do not own any property or land
- Have been contributing at least the 3% minimum amount towards your Kiwisaver scheme for at least 3 years.
- Live in your new home for at least 6 months
- A minimum deposit of 5% of the house value - can come from the following
- Kiwisaver
- First Home Grant approval
- Cash/Savings
- Gift from family
In addition to the above, your income for the last 12 months must be
- Single - $85,000 or less before tax
- Couple - $130,000 or less before tax (if more than 2, it’s still capped at $130k)
Lastly, there are caps on the purchase price on the property you want to buy. If you buy outside these price caps, then you won’t be eligible for the First Home Grant. For example, if you buy in Auckland and you want to use the grant, the maximum purchase you can buy for a brand new home is $650k or if it's an exisitng home the maximum purchase price is $600k.
See table below
Location | Existing/Older Properties | New Properties | |
|---|---|---|---|
Auckland & Queenstown | $600,000 | $650,000 | |
| $500,000 | $550,000 | |
Rest of New Zealand | $400,000 | $500,000 | |
How Much Can I Get From the Grant?
Awesome! You tick all the boxes for getting the First Home Grant, then you are likely to get an approval or pre-approval. But how much can I get from the First Home Grant? It all depends on how long you’ve been in the grant and what type of property you plan to buy.
See the tables below
Exisiting Home | Single Grant Cap | Couple 2+ Grant Cap |
|---|---|---|
3 years with Kiwisaver | $3,000 | $6,000 |
4 years with Kiwisaver | $4,000 | $8,000 |
5 Years with Kiwisaver | $5,000 | $10,000 |
New Home | Single Grant Cap | Couple 2+ Grant Cap |
|---|---|---|
3 years with Kiwisaver | $6,000 | $12,000 |
4 years with Kiwisaver | $8,000 | $16,000 |
5 Years with Kiwisaver | $10,000 | $20,000 |
As you can see, the grant can give you a maximum of $20k on a new home if you buy with another party. Can either be your spouse, partner and siblings too. If you're single buyer then the max on the new home is $10k and if it's exising it's $5k.
5 Pitfalls Of Getting The First Home Grant
- 1If you buy a new home, Kainga Ora considers it new when the house is built with a code of compliance certificate (CCC) issued less than 12 months before the date you apply for the First Home Grant
- 2It can take up to 20 working days to process your First Home Grant application. Start the process early - here is the link for the application form
- 3Previous Homeowners who have used the previous government schemes such as Kiwisaver Home Start Grant or Kiwisaver Deposit Subsidy is not eligible for this First Home Grant by Kainga Ora. Your realisable assets are not more than 20% of the house price cap you plan to purchase. For example, you buy a home $600,000 you can’t have assets worth more than $120,000 (20% of the value of the property). What are realisable assets?
- 4The grant is specifically made for New Zealanders to buy their first home. If you decide to rent out the entire home, you would be in breach of the First Home Grant terms and conditions. But having a flatmate or boarder is fine, as long as you continue to live there.
- 5If you are in between jobs or have taken a suspension but yet want to use the grant in the future without delay. Then you’ll need to continue to make voluntary manual contributions to your Kiwisaver scheme to meet the contribution criteria.
How To Get First Home Grant approval?
So the process is pretty simple, if meet all the certia outlined in the above then you can apply for pre approval of the First Home Grant following this link.
If you've found a home and made an offer which is accepted and signed. Then you can skip the pre approval process and go apply for the full approval here. You'll need to apply for the First Home Grant at least 4 weeks before the settlement date.
Here to Help Into Your First Home
I'm here to help with guidance on getting your first home and if it is by using the First Home Grant. You can flick me an email at will@simplyfinance.co.nz or book in a no obligation 10 min phone call with me below.