HomeStart package for 90,000 first home buyers

  • Nick Smith
Building and Housing

A Government support package for first home buyers that comes into effect today will help 90,000 lower and middle income people into home ownership over the next five years, Building and Housing Minister Dr Nick Smith says.

“HomeStart is the most significant Government support for first home buyers in more than a generation. We are doubling the number of people who will be eligible to receive a Government grant to buy a first home, and doubling the size of the grant they are eligible for if purchasing a new home,” Dr Smith says.

The HomeStart grant for a couple after five years of contributing to KiwiSaver is $10,000 for an existing home and $20,000 for a new home. Today’s changes will cost an additional $218 million over five years. The Government is budgeting for $435 million for HomeStart grants over the next five years.

“This HomeStart package is about helping families on modest incomes pull together a deposit for their first home, and about incentivising the housing development sector to supply more new housing in an affordable price range,” Dr Smith says.

The package comprises three changes:

  • Replacing the KiwiSaver First Home Deposit Subsidy with a KiwiSaver HomeStart grant, doubling the support for buying a new home and increasing the house price limits;
  • Enabling larger KiwiSaver First Home Withdrawals by including the member’s tax credit (meaning first home buyers will now be able to withdraw all of their KiwiSaver savings except the $1000 kick-start);
  • Expanding eligibility for Welcome Home Loans by aligning the house price caps with the new KiwiSaver HomeStart grant.

“It is the combination of KiwiSaver, HomeStart and Welcome Home Loans that makes this package a game-changer for young families aspiring to own their own home. A couple, each on the average income of $50,000, will after five years in KiwiSaver, now be able to withdraw $35,000 from their KiwiSaver accounts, obtain a HomeStart grant of $20,000 and with this $55,000 deposit, be eligible for a Welcome Home Loan requiring only a 10 per cent deposit – enabling them to be in the market for a new home of up to $550,000,” Dr Smith says.

The Minister welcomed the start of the package with the Prime Minister this afternoon at a new housing development in Lower Hutt, Wellington, where they met with prospective buyers who will be enabled by the increased Government support.

“We are today launching an information campaign with Housing New Zealand, who will be administering the new HomeStart scheme, to encourage people to take up the new opportunities for home ownership that this scheme offers. There is a new website which explains eligibility, the income and various regional house price caps, and how the three programmes of KiwiSaver, HomeStart and Welcome Home Loans work. I am also planning a series of public meetings around New Zealand to promote the scheme to prospective homeowners and the housing development sector,” Dr Smith says.

“The HomeStart package complements the wide programme of work the Government already has underway to improve housing supply and affordability, which includes opening up new residential land, reducing tariffs on building materials, investing more in skills, and reducing compliance costs.”

More information is available at: www.kiwisaver-homestart.co.nz.