Last week’s Budget 2022 announcement has brought some welcomed changes to the First Home Grant and First Home Loan Scheme. These changes will hopefully make the First Home Grant and First Home Loan Scheme more accessible and provide further support to New Zealanders who are trying to get into their first home.
First Home Grant
How much money you may be eligible for under a First Home Grant depends on how many years you have been contributing to Kiwisaver and whether you are buying an existing dwelling or a new build.
If you purchase an existing dwelling as a single person, then you could receive between $3,000.00 to $5,000.00. If you are purchasing with a partner and both of you are eligible then the maximum grant you may be eligible for is $10,000.
If you purchase a new build, the grant is larger as the Government want to incentivise building of new homes. As such the maximum amount you may receive as an individual is increased to $10,000 with a minimum of $6,000. If you are purchasing with a partner and you are both eligible, then maximum grant you may be eligible for is $20,000.
Regional House Price Caps
If the property you are purchasing (whether it is a new build or an existing dwelling) is below the region’s house cap you may be eligible for a first home grant. An outcome from the Budget 2022 is that the house price caps have been increased to reflect the current housing market. So, in the Wellington (including Porirua, Lower Hutt, Upper Hutt and Kapiti Coast) the house price cap for a new build has been increased to $925,000.00 and an existing dwelling to $750,000.00.
Income Caps
Your annual income (whether you are a single or a joint buyer) is also a criteria in determining eligibility for the first home grant. The income cap has increased to $95,000.00 a year for a single buyer and $150,000.00 a year for joint buyers. If you are a single buyer with dependents, the income cap is $150,000.00 a year.
The above House price and Income caps are to be reviewed every six months to ensure that the current market is reflected. So hopefully this means that if the market increases again then the caps will increase as well.
First Home Loan
Alongside the First Home Grant, Kainga Ora also offer a First Home Loan Scheme. A First Home Loan can get you into your first home with as little as a 5% deposit.
The outcome of Budget 2022 means that the House caps for First Home Loans have been removed entirely. So, you could be eligible for the loan for a property of any value.
The only criteria now for a first home loan is the above income caps applicable to First Home Grant and additional lending requirements of your chosen bank.
When considering whether you are eligible for the first home grant or first home loan there are further criteria as discussed in our blog here. The Collins and May Team look forward to helping you get into your first home. Contact us today and we can help you through the process.
