What property buyers need to know about insurance
Buyers | 5 December 2018
By THE SETTLED.GOVT.NZ TEAM
Is the dream of home ownership within your grasp? It could be more possible than you think! You may be eligible for government support to buy your first home… including a KiwiSaver HomeStart grant.
Have you been contributing to KiwiSaver? After just three years of contributions, you may be entitled to a KiwiSaver HomeStart grant, administered by Housing New Zealand. Grant values vary according to whether you’re purchasing an existing home (maximum $5,000 per eligible member, capped at max $10,000 per dwelling) or building or purchasing a new home (maximum $10,000 per eligible member, capped at $20,000 per dwelling).
Note: A ‘new home’ should be recently built and have had a code of compliance certificate for six months or under.
You may be able to apply for a KiwiSaver HomeStart grant if you, or anyone you may be buying a home with:
Note: Regardless of the number of eligible KiwiSaver members purchasing a home together, no more than $10,000 worth of grants will be paid for the purchase of an existing/older property and no more than $20,000 for a new home or for the purchase of land on which a home will be built.
See the Housing New Zealand website for the full criteria.
Think you meet the criteria? Great! If you’re actively house hunting we’d suggest applying for pre-approval. This is valid for six months and gives you peace of mind, knowing you can tap into that money when you find a property you want to buy.
We recommend setting up an online myIR account with Inland Revenue if you haven’t already. You can then easily download both your certificate of earnings and KiwiSaver contribution statement, which will both be needed as supporting documentation in your application.
The application process for a KiwiSaver HomeStart grant requires:
* Not required if you are only applying for a pre-approval.
You can apply online via the Housing New Zealand website.
It generally takes up to five working days to process an application, if you have provided the correct supporting documentation. However, seeking pre-approval for a grant is the best way to go – otherwise you’ll need to apply at least four weeks prior to settlement date. This can put a spanner in the works when you’re trying to make a quick purchase. Housing New Zealand will pay the grant by the day of settlement but can’t accept retrospective applications. Follow the good old Scout motto ‘Be Prepared’ and you should be fine!
For most clients, the grant money is paid on the morning of settlement, directly to your solicitor. For new builds and properties purchased off the plans, the money can be paid in advance and held in trust and be released for settlement date.
Yes, you can – in fact this is advisable. Your pre-approved grant is valid for six months, which gives you plenty of time to find a suitable property. It also means you know one way or the other whether you can count on this money for your big purchase.
KiwiSaver first-home withdrawal means you can take out most of the money you, your employer and the Government contributed to KiwiSaver after at least three years in the scheme to purchase your first home – as long as you leave at least $1,000 in your account. You’ll need to apply to your KiwiSaver provider to do this.
This may be possible, but you’ll need to do your homework, including obtaining physical costs and building plans, or evidence from a quantity surveyor if you’re a builder intending to build the house yourself. Contact Housing New Zealand to learn more on 0508 935 266.
We have plenty of suggestions on our website on how first home buyers can fund their first home. For instance: