Explanation of KiwiSaver and Housing New Zealand grants
While KiwiSaver is mainly about saving for your retirement, there are two benefits for KiwiSaver members who are saving for their first home – KiwiSaver HomeStart and KiwiSaver first-home withdrawal.
You can combine KiwiSaver first-home withdrawals and KiwiSaver HomeStart grants (and other personal savings) to assist you with purchasing a home. You may also be eligible for a Welcome Home Loan.
You can potentially join up with other disabled persons and/or families (who are eligible) and purchase a new or existing property together. By combining these grants you may be able to build a larger deposit (although this is capped).
If this is something you are interested in for either yourself or a disabled family member, then ensure you start this process as early as possible.
Using KiwiSaver to save for a home (while receiving a supported living payment)
One of the difficulties facing disabled people who are on a benefit is the ability to save. If you have savings or someone gifts you money then your benefit will be affected, meaning that saving is almost impossible.
One way that you can save for a home is through KiwiSaver. You can pay into KiwiSaver voluntarily while on a benefit, even if you are not employed. This can be a great way to save for a home, as your benefit is NOT affected (unless money is withdrawn and used for other purposes, then it is considered a cash asset).
If money is withdrawn and used to purchase a home then it is NOT considered a cash asset, and therefore does not affect the benefit. The minimum contribution is 3% of your yearly income or benefit. Before you can withdraw funds you need to have contributed for a minimum of three years.
You can also have other people contribute to KiwiSaver (i.e. employers, parents, guardians, trusts, etc). Talk to your case manager and explain who will be paying into KiwiSaver and why. You need to ensure the case manager is aware of the size and frequency of your deposits and what your goal is. Give KiwiSaver a call (0800 559 009) or visit its website for more information.
KiwiSaver first-home withdrawal
KiwiSaver first-home withdrawal is administered by your KiwiSaver scheme provider. If you have been a member of KiwiSaver for at least three years, you may be able to withdraw all your contributions, your employers contributions, returns or investments and any member tax credits (provided you leave a minimum balance of $1000.00 in your account. You can use this money towards purchasing a home.
You need to go through Housing New Zealand for this grant.
The KiwiSaver HomeStart grant provides eligible first-home buyers purchasing an existing home with a grant of between $3,000 to $5,000* for each eligible individual and between $6,000 to $10,000* for couples.
The KiwiSaver HomeStart grant also provides eligible first-home buyers purchasing a brand new home with a grant of up to $10,000 for individuals and up to $20,000 for couples*.
*depending on the length of time you have contributed to the scheme.
To be eligible for a KiwiSaver HomeStart grant you must:
- Have been contributing the required minimum amount (3%) for at least three years and be 18 years or older
- Be purchasing or building your first home
- Have a household income (before tax) of less than $80,000 per year (for one person), or less than $120,000 per year (for two or more people)
- Have a deposit of 10% (this can include money withdrawn from KiwiSaver first-home withdrawal, the KiwiSaver HomeStart grant/s, other savings, etc)
- You can only receive this grant once
- Be aware that processing can take four weeks (or longer)
- The house you are purchasing is yours and will be your primary place of residence for at least six months (it cannot be used to buy an investment property).
You can buy a property with other people who may or may not be KiwiSaver members. If they are members, you may all qualify for Home Start Grants. However, no more than $10,000 worth of grants will be paid in total for the purchase of an existing/older property and no more than $20,000 for a new home or for the purchase of land on which a home will be built.
Visit the online calculator to help you estimate the HomeStart grant you could be entitled to.
If you are a previous home-owner but in a similar financial position to a first-home buyer in terms of income and realisable assets, you may still be eligible for the HomeStart grant. Housing New Zealand will determine this. Contact them to see if you are eligible.
Buying your first home with KiwiSaver
Welcome Home Loan
You may be able to use a Welcome Home Loan with the KiwiSaver home ownership products.
For many buyers, the problem with getting a normal home loan is finding the deposit. Most lenders currently require a minimum 20% deposit. With a Welcome Home Loan you only need a 10% deposit.
Your deposit can be gifted by a relative. You can apply for a KiwiSaver Deposit Subsidy or KiwiSaver Savings Withdrawal. The participating banks set the Welcome Home Loan eligibility.
Check out www.welcomehomeloan.co.nz
Housing New Zealand FirstHome
You might be eligible to purchase a Housing New Zealand FirstHome. These are ex-Housing New Zealand properties located in areas where changing demand has resulted in an oversupply of some types of houses.
If you meet the eligibility criteria, you could receive a grant of 10% of the purchase price of a FirstHome property – up to a maximum of $20,000. For more information visit www.hnzc.co.nz or call 0508 935 266.
Kainga Whenua Loan
You may also be able to use a Kainga Whenua loan to own a home on multiple-owned Maori land. For more information about Kainga Whenua loans visit www.hnzc.co.nz or call 0508 935 266.