Buying your first home has become more and more challenging, particularly for Kiwis who may not have the option of significant financial support from family. To help address this, the New Zealand government provides several schemes designed to help people into home ownership for the first time.
This guide provides a helpful overview of the two main schemes, First Home Grant and KiwiSaver first-home withdrawal. We’ve also included a brief summary of three other initiatives – First Home Partner, Kāinga Whenua and KiwiBuild.
Some of the information below may have changed since this guide was written, so it’s important to check the links provided for further information before making any decisions.
What is the First Home Grant?
The First Home Grant is one way the New Zealand government is helping Kiwis who may be struggling to afford a home of their own. It’s basically a cash gift to help you get a deposit together. There are quite a few rules about who is eligible and how much the house can cost, so here’s an overview of the main points to help you get started.
Who can get a First Home Grant?
To be eligible you need to be older than 18 and have made regular minimum contributions to KiwiSaver or another qualifying superannuation scheme for at least three years. It doesn’t have to be continuously; your contribution periods just have to add up to at least three years.
You can’t currently own a home or land, except Māori land. This includes any house owned by your spouse or defacto partner. If you’re buying a property with others, you’ll have to have an equal share. You’ll also have to live in the new home for six months or more, or at least have that firm intention when you apply.
KiwiSaver contributions for First Home Grant
The KiwiSaver contributions you need to have made for three years or more must have been at least the minimum amount at the time. This was 3% of your income, but following Budget 2022 it became 3% of your total income or $1,000 a year, whichever is less. This applies to all your income sources, not just your main one.
Here’s how this works for people who don’t have contributions automatically deducted from their income:
- People who are self-employed or on a benefit and make voluntary contributions need to make at least one contribution a year for three years; contributions need to be equivalent to least 3% of their annual income or $1,000 a year, whichever is less
- Non-earners need to make voluntary contributions equivalent to at least $1,000 a year, whichever is less
- For anyone who makes a combination of voluntary and automatic contributions, the total must be at least 3% of their annual income from all sources or $1,000 a year, whichever is less
Maximum income limits for First Home Grant
To be eligible for a First Home Grant your income for the 12 months before you apply must be no more than:
- $95,000 when one person is buying a home
- A total of $150,000 when two or more people are buying a home together
- $150,000 when an individual with dependants is buying a home
Deposit rules for a First Home Grant
- Your savings in a bank account
- Your First Home Grant
- Your KiwiSaver first-home withdrawal (see below)
- A gift from a close family member (they’ll need to sign a form declaring it’s a gift, not a loan)
- Any payments you’ve already made towards the home
What can you buy with a First Home Grant?
A First Home Grant can be used to buy an existing home or a newly-built one. There are maximum price limits, known as price caps, for each New Zealand region. The price caps for new properties are higher than for existing or older homes.
The definition of an existing property includes:
- A completed home that got its building code of compliance certificate more than 12 months before your First Home Grant application date
- An existing house you relocate (unless it was newly built within the last 12 months) and the land you move it onto
The definition of a new-build property includes:
- An empty section or land and the new house you’re going to build on it
- A house and land package (i.e. where the build hasn’t started or isn’t finished)
- An apartment purchased off the plans
- A newly-completed home, including one you’re relocating, that got its building code of compliance certificate no more than 12 months before your First Home Grant application date
Buying a section or land to build on with a First Home Grant
You can’t get a First Home Grant to build on land you already own. Instead, you must apply for pre-approval at least four weeks before you settle (pay for) the section or land.
For the grant to go ahead (full approval), you’ll need to provide:
- A signed sale and purchase agreement for the land or a copy of your right to occupy Māori land
- The building plans and specifications
- Either a fixed price contract or a quantity surveyor’s costing for the house that will be built
Buying off the plans with a First Home Grant
When buying a property off the plans (one that hasn’t been built yet) your grant application will need to include:
- A copy of the building plans and specifications
- A signed contract that shows the purchase price, property details and expected start and finish dates for the construction, as well as a sunset clause
What are the maximum house prices for a First Home Grant?
The price caps refer to the total cost of the property. If you’re not buying through a real estate agent, you may need to provide a registered valuation to show you paid a fair market price.
In Budget 2022, the price caps were increased for many parts of New Zealand. Here are the Budget 2022 price caps for some main regions, as defined by the territorial authority boundaries.
| Region | Existing properties | New properties |
|---|---|---|
| Auckland | $875,000 | $875,000 |
| Hamilton urban area | $650,000 | $725,000 |
| Tauranga urban area | $800,000 | $875,000 |
| Wellington urban area | $750,000 | $925,000 |
| Christchurch urban area | $550,000 | $750,000 |
| Dunedin City | $500,000 | $675,000 |
How much is a First Home Grant?
| Total KiwiSaver contribution time | Existing property grant | New-build property grant |
|---|---|---|
| Three years | $3,000 | $6,000 |
| Four years | $4,000 | $8,000 |
| Five or more years | $5,000 | $10,000 |
How do you apply for a First Home Grant?
You apply for a First Home Grant online. The option to first apply for pre-approval is highly recommended. It lets you plan with confidence and saves time applying for full approval once you find the property you want.
Pre-approval lasts for six months before you need to reapply. Once you find a property to buy, you need to provide the extra documents for full approval at least two weeks before your settlement date.
If you don’t have pre-approval and your offer on a property has been accepted, you must apply for the grant at least four weeks before the settlement date.
The Kāinga Ora website has more on First Home Grant.
What is a KiwiSaver first-home withdrawal?
Who can get a KiwiSaver first-home withdrawal?
KiwiSaver first-home withdrawal if you’ve already owned a home
If you’ve owned a property before, it may still be possible to make a KiwiSaver first-home withdrawal if Kāinga Ora decide you are in the same financial position as a first home buyer. It’s known as a KiwiSaver Withdrawal Determination.
For you to qualify, Kāinga Ora will need to know that you:
- Have been a KiwiSaver member for at least three years
- Have not withdrawn KiwiSaver funds to buy a property before
- No longer own any share of any property, except Māori land
- Don’t own realisable assets that together are worth more than 20% of the price cap for existing properties in the region you intend to buy (see table of price caps above)
These realisable assets include things like money you have in a bank or other financial institution; shares and bonds; a boat or caravan worth more than $5,000; vehicles you don’t use as your normal transport method; a deposit you’ve already paid on the property; or any other asset valued at more than $5,000.
The Kāinga Ora website has more on KiwiSaver first-home withdrawal.
Other ways to get help with buying your first home
First Home Partner
If you can’t quite get the required deposit and mortgage together for a first home of the type you need, Kāinga Ora might agree to buy the home with you. If they do, you and Kāinga Ora will each own a share of the property based on how much of the purchase price you each paid.
Kāinga Ora will contribute up to 25% of the purchase price or $200,000, whichever is the lower amount.
You’re expected to buy back Kāinga Ora’s share within 15 years if at all possible, and must buy it back within 25 years. Each year, they’ll provide budgeting and financial advice to help ensure you’re on track to meet this requirement. The property will be entirely yours to live in, but you will need to get their permission before renovating, improving or selling the property.
There are quite a few rules around who is eligible for First Home Partner. Some are similar to other first home assistance options. Here are a few examples of First Home Partner rules:
- Your total household income must be no more than $130,000 before tax
- You must have a deposit of at least 5% of the purchase price
- A participating bank must be prepared to give you a mortgage
The deposit can include money from the same sources as a deposit for a First Home Grant.
If you’ve previously owned a home, but no longer do, you may still be eligible for First Home Partner. However, you can’t have had it before or have realisable assets worth more than 20% of the house price caps for properties in the area you’re buying in. The definition of realisable assets is the same as it is for a KiwiSaver first-home withdrawal (see above).
The Kāinga Ora website has more on First Home Partner.
Kāinga Whenua
This loan scheme from Kāinga Ora and Kiwibank is for Māori land trusts, and individuals with a right to occupy their multiple-owned Māori land. It’s designed to help Māori with home ownership on their multiple-owned land by securing the loan against only the house and not the land it is on.
The Kāinga Ora website has more on Kāinga Whenua loans.
KiwiBuild homes
This government programme works with developers to provide new-build homes at more affordable prices. To be eligible to buy one, you can’t be a current homeowner and your before tax income must be no more than $120,000 for a one person buyer or a total of $180,000 for people buying a property together. There are other criteria to check.
KiwiBuild homes can be apartments, terraced homes, duplex homes or stand-alone houses. There are set maximum prices, depending on the location and number of bedrooms. In July 2022 these ranged from $500,000 to $650,000. Some KiwiBuild homes are sold directly to approved buyers; where there is high demand, interested buyers enter a ballot draw.
To learn more, visit the KiwiBuild website.
Free guides for first-home buyers
To learn more about mortgages and buying a first home, see our:
→ NOTE: This guide was published 2nd December 2021 and updated on 19th July 2022.
