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First home buyers to receive double deposit subsidies

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From April 1st 2015 first home buyers will receive double deposit subsidies. 

The Government’s changes to the existing KiwiSaver Home Start program are expected to increase the numbers of lower and middle income first home buyers by approximately 90,000 over the next 5 years.

The first of these changes is the change to the KiwiSaver First Home Deposit Subsidy. The new KiwiSaver Home Start grant will be twice the amount of the previous subsidy, so for example, a KiwiSaver account that is 3 years old will receive a subsidy of $6,000 instead of $3,000. An account that is 5 years old will receive $10,000 instead of $5,000. A couple both with KiwiSaver accounts therefore can receive a subsidy of up to $20,000.

The second change will mean that larger withdrawals will be possible by including a member’s tax credit in the total able to be withdrawn with all of their KiwiSaver savings except for the initial $1,000 kickstart.

The eligibility for Welcome Home Loans will be changed by aligning house price caps to the new KiwiSaver Home Start grant. The house price limits for KiwiSaver Home Start and Welcome Home Loans will be $550,000 in Auckland and $350,000 in Hawke’s Bay.

In addition to there being limits to the maximum value of a house to be purchased, there are also income limits as to those buying a first home. The KiwiSaver Home Start grant and Welcome Home loans are available for buyers having income below $80,000 for an individual and $120,000 for a couple, and the house being within the regional house price limits.

For prospective home owners in Hawke’s Bay, the doubling of the Home Deposit subsidies will provide a boost to those seeking to put together a deposit for their first home. Sales activity in April this year when the above changes come into force is anticipated to increase dramatically, according to Tremains Real Estate director, Simon Tremain.

                          

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