Prices for homes in New Zealand are higher than they have ever been. Sadly, this means that it can be incredibly difficult to get on the housing ladder for first time buyers. Thankfully though, there are a number of grants available for those that are buying a home for the first time in the country. On this page I want to take a little look at what is available and perhaps more importantly how you can obtain a first home buyers grant.
Perhaps the most popular first home buyers grant in New Zealand is the one provided for those that are part of the KiwiSaver scheme. This should be pretty much almost everybody that is in employment. This scheme is available for those that are over the age of 18 and who have been actively contributing to their KiwiSaver account for at least three years.
There are two ways in which you can achieve a sort of ‘grant’ through being a KiwiSaver. The first is a grant for your deposit. You will get $1,000 for every year you have been a member of the scheme up to $5,000. You can combine this with a partner that you are purchasing a home with. This means that you can have a grant of around $10,000 towards your deposit. This is fantastic! In addition to this, normally your savings will be locked away until you retire. However, if you are a new home owner then there is a chance that you will be able to withdraw the money that you have contributed over the years to put towards the purchase price of your home. Bear in mind though that this is NOT a grant. Instead you are dipping into your savings and thus you will need to make a decision as to whether it is worth it or not. Whatever route you go down though you will be able to apply directly through your local KiwiSaver provider.
The second option that you have is a government supported scheme known as the ‘Welcome Home Loan’. This particular loan is designed for those that only have a small deposit that they can place, or no deposit at all. You will of course need to repay your loan which generally will be the same price as a mortgage. Before you apply however you will need to meet a couple of requirements. These are:
- Your combined total income for your household is less than $85,000 before tax. If three or more people will be borrowing then it is $120,000.
- The maximum that can be borrowed with no deposit is $200,000. With a small deposit, it can either be $280,000 or $350,000 depending on the location that you will be purchasing in.
- Be a citizen of New Zealand or have a resident’s visa.
This is strictly a first home buyers grant. If you already own a property then you will not qualify. It is also not for those that are planning to rent.
In order to apply for your Welcome Home loan, you will need to find a lender which participates in the scheme. There are plenty of them around. Bear in mind though that each and every lender will have their own criteria with which to award you with a loan or not. The interest rates and fees will also be different. It is suggest that you shop around in order to find the best deal for your needs. As of the 1st of October, things are changing so it would be good idea to check out their website for more information. Things may look tough at the moment but it’s great to know there are some good first home buyer grant schemes around to help out.
