Home » Articles » The KiwiSaver HomeStart Grant - What You Need to Know

, Tom Willis

May 2018 . . . In April 2015 the Government introduced the “Kiwisaver Homestart Grant” to assist first time home buyers with their funding for the purchase of a home.

The Grant is typically $3,000-$5,000, but varies depending on the type of property being purchased. It is usually paid to your solicitor on the settlement date. It can only be used to contribute towards the final settlement price.

AM I ELIGIBLE FOR A GRANT?

There a number of criteria that you need to satisfy to be eligible for the Grant:

• You must be 18 years or over.
• You must not currently own a home or land or have an interest in land in NZ or overseas. An interest in land includes an unregistered interest such as living on a property that is owned by your partner.
• You must not have received the Grant or the previous Kiwisaver deposit subsidy before.
• You must be a member of a Kiwisaver scheme, complying fund or exempt employer scheme.
• You must have earned under the income cap:
  • Sole purchaser: less than $85,000 (before tax) in the past 12  months; and
  • If there is more than one purchaser: a combined income of less than $135,000 for the past 12 months.
• You must have evidence of a 10% deposit. This can comprise of Kiwisaver withdrawal, the Homestart Grant, funds held in the bank and gifts from relatives.
• The property you are purchasing must be under the regional price cap. In Dunedin, the price cap is $400,000 for an existing property and $450,000 for a new build.
• If you are purchasing undeveloped land then a signed fixed price building contract containing clear construction start and end dates (and a sunset clause) must accompany the application. The cost of the land added together with the cost to build the house must be lower than the property cap.
• You must live in the house you are purchasing for the immediate six months after settlement, or for six months immediately after the Code Compliance Certificate is issued for new builds.

If you sell the house or move out within 6 months then you may be required to repay the Grant.

HOW MUCH COULD I BE ELIGIBLE FOR?  

If you have had three full years of consistent minimum income percentage contributions to Kiwisaver (these three full years do not need to be consecutive) then you may be entitled to the Grant. The amount will depend on whether the house is existing or newly built:

Number of full years contributing (at least the minimum) to Kiwisaver Fund	Amount of Grant
	Existing Property	New Build
	Individual	Individual
1	Not eligible	Not eligible
2	Not eligible	Not eligible
3	$3,000	$6,000
4	$4,000	$8,000
5+	$5,000	$10,000

If purchasing an existing property, the Grant is calculated at $1,000 per year up to a maximum of five years and if you are purchasing a new build then the Grant is calculated at $2,000 per year up to a maximum of five years.

Grants can be joined together by eligible buyers when more than one person is purchasing a property. However, the maximum amount that can be paid out for any one property is:

• $10,000 for an existing property; and
• $20,000 for a new build.

WHAT ARE THE TIME FRAMES?

You can apply for pre-approval prior to entering into an agreement for sale and purchase. Pre-approval is valid for 180 days and streamlines the application process once you have entered into an agreement. If you have pre-approval then the official application needs to be submitted 10 working days prior to settlement.

If you don’t have pre-approval, then we recommend that the application is submitted at least 20 working days prior to settlement.

WHAT IF THIS IS NOT MY FIRST PROPERTY PURCHASE?

Provided that you satisfy all the other criteria listed above, you may still be eligible for the Grant.

To qualify for the Grant you cannot have “realisable assets” that are worth more than 20% of the property price cap for the area you are purchasing in.

“Realisable assets” are assets that you can sell to help you purchase the Property. These may include vehicles, boats, investment shares and other similar assets.

WHAT DO I NEED IN MY APPLICATION?

You need to include the following in your application:

• A certificate of earnings for the last 12 months (these can be sourced from the IRD website);
• The full names and certificate of earnings for the last 12 months of all the other purchasers listed on the agreement (regardless of whether they are applying for the Grant or not);
• A Kiwisaver contribution statement (these can be sourced from the IRD website);
• A photocopy of your birth certificate, passport or drivers licence;
• A copy of the last two months of your payslips;
• The agreement for the sale and purchase of the property or land;
• A signed fixed price building contract if you are purchasing land; and
• Evidence of having the minimum 10% deposit.

 

We strongly encourage you to take advantage of this opportunity. If you have any concerns or questions about the Kiwisaver Homestart Grant then please get in touch with us. We can walk you through the application process or complete the application on your behalf. 

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Tom WillisAstrid Bond