As signalled late last year, a series of changes to the KiwiSaver first home buyer packages will come into effect on 1 April 2015. These changes will allow first home buyers to make bigger withdrawals from their KiwiSaver accounts and potentially receive more financial assistance from the Government.
What's changing?
The KiwiSaver First Home Withdrawal will be expanded to include member tax credits - this means first home buyers will be able to withdraw all of their KiwiSaver savings except the $1,000 Government kick-start.
The KiwiSaver First Home Deposit Subsidy will be replaced by the KiwiSaver HomeStart Grant. This will double the support for buying or building a new home and increase the house price limits.
Expanding eligibility for Welcome Home Loans by aligning house price caps with the new KiwiSaver HomeStart Grant.
The following table outlines the key changes:
KiwiSaver First Home Withdrawal
Current rules |
---|
The first homer buyer can withdraw all funds except: - member tax credits - the government $1,000 kick-start contribution |
Changes from 1 April 2015 |
---|
The first homer buyer can withdraw all funds except: - the government $1,000 kick-start contribution |
Subsidy/Grant
Current rules | ||
---|---|---|
KiwiSaver First Home Deposit Subsidy | ||
KiwiSaver contributions | Single | Couple |
3 years | $3,000 | $6,000 |
4 years | $4,000 | $8,000 |
5 years | $5,000 | $10,000 |
Changes from 1 April 2015 | ||
---|---|---|
KiwiSaver HomeStart Grant (existing home) | ||
KiwiSaver contributions | Single | Couple |
3 years | $3,000 | $6,000 |
4 years | $4,000 | $8,000 |
5 years | $5,000 | $10,000 |
KiwiSaver HomeStart Grant (new home) | ||
KiwiSaver contributions | Single | Couple |
3 years | $6,000 | $12,000 |
4 years | $8,000 | $16,000 |
5 years | $10,000 | $20,000 |
House price caps for KiwiSaver HomeStart Grant & Welcome Home Loans
Current rules | |
---|---|
Auckland | $485,000 |
Wellington & Queenstown | $425,000 |
Christchurch & Selwyn district | $400,000 |
Hamilton, Tauranga, Western Bay of Plenty, Kapiti Coast, Upper Hutt, Hutt City, Porirua, Tasman Nelson & Waimakariri | $350,000 |
All other areas | $300,000 |
Changes from 1 April 2015 | |
---|---|
Auckland | $550,000 |
Wellington & Queenstown | $450,000 |
Christchurch & Selwyn district | $450,000 |
Hamilton, Tauranga, Western Bay of Plenty, Kapiti Coast, Upper Hutt, Hutt City, Porirua, Tasman Nelson & Waimakariri | $450,000 |
All other areas | $350,000 |
Visit our web page to see if you're eligible for a first home withdrawal.
So what might the numbers look like for a first home buyer?
Let's use the example of a couple in Hamilton who each earn $50,000.
After five years of contributing to their KiwiSaver account at the minimum 3% rate they will be able to withdraw $32,585 (excludes the impact of investment returns) made up as follows:
| Per person | Couple |
---|---|---|
Employee contributions over five years | $7,500 | $15,000 |
Employer contributions over five years (after deducting Employer Superannuation Contributions Tax) | $6,188 | $12,375 |
Member Tax Credits | $2,605 | $5,210 |
Combined savings to withdraw |
| $32,585 |
They will also be eligible to receive a $20,000 KiwiSaver HomeStart Grant, giving them $52,585 to put towards the purchase price.