Rent, Buy or Own
KiwiSaver home ownership features
KiwiSaver is a government-sponsored, work-based savings initiative that aims to increase New Zealanders’ level of savings and assets (including home ownership).
KiwiSaver has three features to help you buy, and pay for your home.
Mortgage diversion
A year after joining KiwiSaver, you can divert up to half of your contributions towards paying your mortgage.
Only some KiwiSaver providers offer mortgage diversion, and mortgage providers will need to allow it. If mortgage diversion is important for you, make sure you check with your KiwiSaver scheme and mortgage provider when signing up. More information is available from www.kiwisaver.govt.nz
First home withdrawal
After three years of KiwiSaver membership you may be able to withdraw all, or part, of your savings (not government contributions) to put towards buying your first home.
Applications for such withdrawals need to be made to your KiwiSaver provider.
Note that such withdrawals exclude the $1,000 government kick-start and member tax credit. Also, you must live at the property — savings cannot be used to purchase an investment property.
More information is available from www.kiwisaver.govt.nz
Deposit subsidy
In addition to a first home withdrawal, after three years of contributing to KiwiSaver, you may be entitled to a first home deposit subsidy.
The subsidy, administered by Housing New Zealand, is $1,000 for each year of contribution to the scheme, up to a maximum of $5,000 for five years for each member.
To be eligible for the deposit subsidy your income must be less than $100,000 (for one or two people) or $140,000 (for more than two people). Also, you must buy a lower-priced home*.
The house must be a “lower quartile” priced property. Currently this means the house must cost $400,000 or less in higher-priced areas such as North Shore City, Auckland City and Queenstown Lakes District, and $300,000 or less in the rest of New Zealand.
Previous home owners
If you have previously owned a home, but no longer have a share in a property, you may also be eligible for the first home withdrawal and the deposit subsidy — as long as you:
- Have not received either the first home withdrawal or the deposit subsidy before; and
- Are in a similar position to first home buyers in terms of assets, income and liabilities.
This recognises that some people no longer own a home due to adverse circumstances such as redundancy, illness or relationship break-up, and ensures that these people are not excluded.
Those who have previously owned a home will need to apply to Housing New Zealand for a determination that they are in a similar position to first home buyers.
More detailed eligibility criteria, based on assets, income and liabilities will be developed before 1 July 2010 when the first KiwiSavers will be eligible to take up the first home withdrawal and deposit subsidy (based on the requirement for a minimum of three years membership and contribution).
These criteria will be to ensure that people who are simply moving home, or trading up, will not be able to access the deposit subsidy and first home withdrawal.
KiwiSaver Deposit Subsidy Eligibility Criteria and Loan Conditions
To be eligible for the first home deposit subsidy, you must meet all the following criteria and conditions:
- Be a member of a KiwiSaver scheme, or a complying superannuation fund
- Have contributed around four percent of your income to a KiwiSaver or complying superannuation fund for at least three years
- Have a household income (before tax) of less than $100,000 a year (for one or two people), or less than $140,000 per year (for more than two people)
- Be buying a lower-priced home*
- Be buying your first home (or have a determination from Housing New Zealand Corporation that you are in the same position as a first home buyer in terms of income, assets and liabilities)
- Be planning to live in the house for at least six months.
Note: The eligibility criteria relating to the income caps and regional house price caps will be reviewed in 2009 before the policy takes effect. The first deposit subsidies will be paid out in 2010 to those who started KiwiSaver contributions in 2007.
