National plans KiwiSaver changes

National has announced a range of new options designed to help first-home buyers into properties.

Sunday, August 24th 2014, 12:00AM

by The Landlord

If it is the Government after the election, it will replace the KiwiSaver first-home deposit subsidy with a KiwiSaver HomeStart Grant, doubling the amount that is available to new buyers who purchase a newly-built house.

KiwiSaver withdrawals will also be able to include the member tax credit of $512 a year and Welcome Home Loan price caps have increased.

“We are roughly doubling the number of people receiving a Government grant to buy a first home from 10,000 per year to 20,000 per year, and doubling the Government grant they are eligible for if buying a newly-built home,” Housing Minister Nick Smith said.

The changes would come into effect next April. First-home buyers are eligible for a grant of $3000 after three years in KiwiSaver, $4000 after four years and $5000 after five years. Under KiwiSaver HomeStart, this grant would double to $6000 after three years, $8000 after four years and $10,000 after five years for the purchase of a newly-built home.

The house price limits for KiwiSaver HomeStart and Welcome Home Loans would be $550,000 in Auckland, $450,000 in Wellington, Christchurch and other similarly-priced housing markets, and $350,000 for the rest of the country, Smith said.

The KiwiSaver HomeStart Grant and Welcome Home Loans have additional criteria of people having an income below $80,000 for an individual and $120,000 for a couple.

“The package means a couple in Auckland each earning $50,000 who have contributed to KiwiSaver for five years will be able to withdraw $35,000 and receive a $20,000 KiwiSaver HomeStart Grant, giving them a $55,000 deposit on a new home. With the Welcome Home Loan scheme allowing only a 10% deposit, they will be able to buy a home up to $550,000 in value," Smith said. "This is the most significant Government support for first home buyers in more than a generation and will come into effect on 1 April 2015. KiwiSaver HomeStart will cost an additional $218 million over the next five years.”

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