A complete guide to first home loan grants and KiwiSaver

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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. In November 2021 it was 3% of your income. 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
  • Non-earners need to make voluntary contributions equivalent to at least the minimum amount (3% in 2021), based on a 40 hour week at the adult minimum wage
  • 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

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

Deposit rules for a First Home Grant

When you apply for a First Home Grant, you must prove you have a deposit that’s at least 5% of the purchase price of the house you want to build or buy.

Your deposit can include money from one or more of these sources:

  • 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 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 that got its building code of compliance certificate less 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

The total cost of the land, land preparation and completed house construction can’t be more than the relevant price cap.

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
The grant may provide some help with initial or progress payments, provided they’re held in a trust account and not paid to the developer until you settle on (pay for) the completed property.

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.

Here are the price caps at November 2021 for each region, as defined by the territorial authority boundaries.

RegionExisting propertiesNew properties
Auckland$625,000 $700,000
Queenstown-Lakes District$600,000 $650,000
Kāpiti Coast District, Porirua City, Upper Hutt City, Hutt City, Wellington City$550,000 $650,000
Hamilton City, Tauranga City, Western Bay of Plenty District, Waipa District, Hastings District, Napier City, Nelson City, Tasman District$525,000 $600,000
Waimakariri District, Christchurch City, Selwyn District$500,000 $550,000
Waikato District, Dunedin City$425,000 $550,000
Rest of New Zealand$400,000 $500,000

How much is a First Home Grant?

The amount you can receive from a First Home Grant depends on the total time you were making regular contributions to KiwiSaver. So any gaps when you weren’t making contributions don’t count. It also depends on whether your grant is for an existing or a new-build property as described above.

Total KiwiSaver contribution timeExisting property grantNew-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?

It’s when you withdraw money from your KiwiSaver account to buy a home you will live in, not an investment property. You just have to leave at least $1,000 in your fund. Some complying funds other than KiwiSaver allow similar withdrawals. Your withdrawal is paid directly to your lawyer, on or before the settlement day for your property purchase.

Who can get a KiwiSaver first-home withdrawal?

If you’re buying your first home and have been a member of KiwiSaver for at least three years, you simply apply to your scheme provider to make a first-home withdrawal. If you’re a member of a complying fund, you discuss making a withdrawal with them instead.

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

Kāinga Ora and KiwiBuild provide additional programmes to help people who are finding it difficult to afford their first home. You can still use a First Home Grant and/or a KiwiSaver first-home withdrawal to help finance a home purchased through these schemes.

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 November 2021 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:

DISCLAIMER: The information contained in this article is general in nature. While facts have been checked, the article does not constitute a financial advice service. The article is only intended to provide education about the New Zealand mortgages and home loans sector. Nothing in this article constitutes a recommendation that any strategy, loan type or mortgage-related service is suitable for any specific person. We cannot assess anything about your personal circumstances, your finances, or your goals and objectives, all of which are unique to you. Before making financial decisions, we highly recommend you seek professional advice from someone who is authorised to provide financial advice.

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