Helping you into home ownership

Owning your first home can feel like a daunting task, but for those who are struggling to make it a reality there are some really great government programs that can help get you across the line.

There are five main schemes currently on offer from the government that help first-time homebuyers.  These are the Kiwisaver First Home Withdrawal, the First Home Grant, First Home Loan, First Home Partner, and Kiwibuild.  We’ll go over each of these in a little more detail.

1. Kiwisaver First Home Withdrawal

If you are in Kiwisaver and have been a contributing member for at least three years of at least 3% of your pay, you may be able to make a withdrawal from your savings to put towards buying your first home. 

This can only be used for a property you intend to live in, not a rental.   To apply, contact your Kiwisaver provider directly. They should be able to provide you with an eligibility letter. This letter includes confirmation of your eligibility to make a first home withdrawal, as well as your estimated withdrawal amount.

If you have owned a home before but are now in the same position as a first home buyer, you may also be able to use a Kiwisaver First Home Withdrawal provided you haven’t used one before. 

If you fall in this category you will need to apply first through Kainga Ora and then send the letter from Kainga Ora to your Kiwisaver provider when you apply to them for the withdrawal.

2. First Home Grant

If you are in Kiwisaver this scheme gives you a boost to your deposit of up to 5000 for an existing home and up to 10,000 for a new home or land (per first home buyer)

If you buy an existing home, you can get $1,000 for each of the 3 (or more) years you've paid into your Kiwisaver. The most you can get is $5,000 for 5 or more years.

If you buy a new home or land to build on, you can get $2,000 for each of the 3 (or more) years you've paid into the scheme. The most you can get is $10,000 for 5 or more years.

You can apply for the First Home Grant before you start looking to give you certainty around eligibility and how much you qualify for.

If you have made a successful offer on a property and don't have a First Home Grant pre-approval, you need to apply for a First Home Grant at least 4 weeks before the day of settlement.

There are FHG eligibility criteria that you as a buyer must meet, and also property criteria that must be met and house price caps depending on the area you intend to buy in.

3. First Home Loan 

Under a FHL borrowers can apply for up to 95% lending and the loan is underwritten by Kāinga Ora allowing you to borrow more than you otherwise would be able to

With a First Home Loan, you only need to provide a 5% deposit, making it easier for you to purchase your first home.

The 5% can be made up of: 

• Your KiwiSaver first-home withdrawal

• Your First Home Grant approval/ pre-approval amount

• Money that you have saved in the bank

• Money you have already paid towards the property

• A gifted amount from a close family member

First Home Loans are backed by Kāinga Ora and are exclusively provided by specific banks (Westpac, Kiwibank, Co-op- Bank, SBS, Unity, NBS and NZHL) to allow for lending options that may not align with their typical lending policy. There are also income and property  FHL eligibility criteria that must be met in order to qualify.

4. First Home Partner 

Kāinga Ora owns a percentage of your property with you until you can afford to buy it off them.

The maximum contribution Kāinga Ora will make towards a home purchase is 25% or $200,000 – whichever is lower.

If you are a first home buyer who is struggling to buy a new home, First Home Partner may be able to help you close the gap. This is a shared ownership scheme where you partner with Kāinga Ora in your purchase and you both own the home until you can afford to purchase the full property off them. You must purchase their share off them within 25 years

The First Home Partner scheme also has FHP eligibility criteria.

5. Kiwibuild

Kiwibuild is a Government initiative to get first home buyers into an affordable first home.

To do this, the Government has put $2 billion towards building 100,000 modest entry-level homes around the country, half of which will be in Auckland. The sale price of a KiwiBuild home is set by the developer and will reflect its type, size and location. To keep KiwiBuild homes in more affordable price ranges, price caps are used that set the maximum price all KiwiBuild homes can be sold for. The properties come in:

• 1 bedroom, studio or one+study.

• 2 bedroom.

• 3 bedroom

The price that the properties are capped at depends on region but generally speaking these homes are much more affordable than you could find on the open market.

There are some eligibility requirements: your combined gross household income must no more than $200,000 per year, or $150,000 if you’re single with dependents and $120,000 if you’re single, and you have to live in the home for at least three years. 

There are some things to be aware of. You don’t get to choose the exact house – you go into a ballot for the area and if successful you’re given the chance to buy a house on the site.  However you are under no obligations to go ahead.

Having your eligibility for KiwiBuild pre-approved can help speed up the purchase process when you have found a KiwiBuild home you would like to buy. You will also need to be pre-approved in order to enter the draw for any homes sold by ballot.

So that’s it! The five main government programmes available. Have you considered them all? Do you need to know more?

There is a lot of support available, but sometimes it can be overwhelming knowing even where to start. Talk to a financial adviser early on in your home buying journey and make sure you’re aware of your options and that you’re doing all that you can to qualify for all of the support available to you. Reach out if you’d like to chat.