Changes to Kāinga Ora First Home Grant
Changes to Kāinga Ora – Homes and Communities’ (“Kāinga Ora”) first home products were recently announced as a part of Budget 2022. The aim is to reach a wider range of first home buyers in assisting them to get on the property ladder.
These changes may mean that if you previously were not eligible to receive assistance through Kāinga Ora you may be now!
Kāinga Ora offers a range of first home ownership products which we will briefly touch on below and outline the key changes brought on by Budget 2022.
First Home Grant – this is probably the most well-known product that Kāinga Ora offers. If you have been contributing to KiwiSaver for a least 3 years you may be eligible for this grant. For existing homes you can get $1,000 for each of the 3 (or more) years you have been paying into KiwiSaver with a cap of $5,000 total. For a new home or land which you will be building your home on in the near future you can get $2,000 for each of the 3 (or more) years you have been paying into KiwiSaver with a cap of $10,000 total. For example, if you are a couple who have both been contributing to KiwiSaver for 5+ years and are purchasing a new build, off plans, then you should both be entitled to the maximum First Home Grant of $10,000 each.
There are KiwiSaver contribution requirements, income caps, and property price caps which is where the new Budget 2022 changes come in. A new income cap category has been introduced for an individual buyer with dependants, being $150,000 in the last 12 months. Traditionally they would have fallen under the individual buyer income cap of $95,000 in the last 12 months. Property price caps vary from region to region and have been raised to reflect the increased lower quartile estimated values for new and existing properties. In Christchurch the price cap for an existing property is now $550,000 and $750,000 for a new build.
First Home Loan – selected banks issue First Home Loans which are underwritten by Kāinga Ora and only require a 5% deposit rather than the usual 20%. Amongst the changes announced with Budget 2022, house price caps for the First Home Loan have been removed entirely to allow greater flexibility for purchasers.
First Home Partner – if your deposit and the amount the bank is willing to lend you is not enough to get you into your first home, Kāinga Ora may assist by topping up your deposit and in return they will own a portion of your property relative to how much they have lent you. You can pay Kāinga Ora off in smaller increments (of no less than $1,000) or in one lump sum when you are able to do so. Kāinga Ora will meet with you yearly to review your financial circumstances and work towards the goal of you achieving full home ownership.
Kāinga Whenua Loan scheme – ThisKāinga Ora and Kiwibank initiative was introduced to help Māori achieve home ownership on their multiple-owned Māori Land as usual financing can be difficult to obtain in this situation. The difference is that a Kāinga Whenua Loan takes security over the house only rather than the house and land like a standard bank would require. Budget 2022 raised the total lending amount available from $200,000 to $500,000.
As with all Kāinga Ora products there are various criteria and conditions you must meet.
If you are a first home buyer we would love to hear from you to discuss your options and we offer a first home buyers special to assist you in getting into your first home.