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First home buyers to get even more help from KiwiSaver

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First home buyers to get even more help from KiwiSaver.

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?

  1. 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.
  2. 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.
  3. 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.

 

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