On the 1st July 2010 something happened which could forever change the way Kiwi’s get into their first house. Like most people, I bet you missed it. The big news?

If you’re wanting to buy your first home and you’ve been in Kiwisaver for three years (ie since 1 July 2007) then you could get a $3,000 top up to your deposit. In fact your first home subsidy is $1000 for every year you’ve been in Kiwisaver to a maximum of $5000. And yes, if you’re buying as a couple you can combine subsidies and double up. It doesn’t end there either because you can actually withdraw everything that you and your employer have put into the scheme so far as well as getting the subsidy itself. Not bad!

When you add it all up things are looking pretty rosy for the first timer. House prices are off their peak which means you should get a fair deal maybe even a bargain. Yes interest rates will rise but only in line with economic performance which is expected to be a slow creep. Now this! If you’ve been waiting, now is the time to act.

Naturally there are some eligibility criteria which are pretty simple and easy to meet. Generally speaking:

You must have contributed at least 2% of your income for the last 3 years
The house must be for you to live in. It can’t be a rental property.
There are income caps

if buying as a couple or individual your combined gross income must be $100,000pa or less
if buying as a group of three or more, then a combined gross income of $140,000pa applies
There are house price maximums too

The house price must be no more than $400,000 in Auckland, North Shore, Rodney, Queenstown and Wellington or
no more than $300,000 in Manukau and Waitakere Cities, Franklin and Papakura Districts and all other areas
Some of those caps might seem a bit low but remember this scheme is designed to help get you on the ladder, not get direct access to the penthouse suite.

Can I get pre-approval?

Absolutely. Apply through Housing New Zealand by completing the form on their website to see if you meet the subsidy criteria. If you’re successful you’ll be notified in writing and you can count on it when adding up your total deposit (which you’ve begun accumulating. You have been eh?).

For more information you can check out hnzc.govt.nz or ask your existing Kiwisaver provider.

About Campbell Hastie

Cam is one half of Auckland based mortgage brokers, The Go 2 Guys.

He makes a living by sharing what he knows about mortgages with people, arranging mortgages for people and then insuring people.

He doesn't claim to know everything about mortgages himself which is why he teamed up with David Mercer — hence the ‘2’ in Go 2 Guys.

He writes posts regularly on his blog and has been told he has an ability to share his knowledge in a simple and sometimes memorable way.

Feel free to comment and ask any questions. Contact Campbell Hastie m: 027 697 7789.

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