The Government has announced some changes to the KiwiSaver Homestart grant (and by extension the Welcome Home Loan) that kick in today.
The Homestart grant is a grant of $1,000 per year you have been in KiwiSaver up to 5 years, that can go towards your home deposit. Both borrowers on a loan can get this and if you are buying a brand new home its doubled.
The changes are:
- The Current maximum income for a single borrower is going from $80,000 to $85,000 per year.
- The Current maximum income for 2 or more borrowers is going from $120,000 to $130,000 per year.
- The maximum house price in Wellington is going from $450,000 to $500,000 and in Auckland from $550,000 to $600,000.
- If you are buying a brand new home the maximum house price goes up another $50,000.
- The restrictions for Welcome Home loans – which are the same as the Homestart grant restrictions increase the same as steps 1-4. Most people won’t need the Welcome Home Loan, but for those that do, it’s great.
For second chance first home buyers (i.e. people who have owned a home before but do not now), there was also a change on 1 July 2016 that removed the maximum income to be allowed to get your KiwiSaver out. So this means that a 2nd chance first home buyer has a better chance of being able to use your KiwiSaver, and for a more expensive property.
It’s not a Panacea to the current crazy market, but it will help first home buyers to be able to buy a home at a higher price. Many of the first home buyers we speak to cannot find a home at the current $450K, unless they go further out, or buy very small, so now they have a chance to get a slightly bigger place, and with the change to building, it’s slightly more likely you can actually build a brand new home to get the doubled grant.
As always if you are looking for advice on this, don’t hesitate to let us know and forward this to your friends who are first home buyers.
By Alan Borthwick