Kiwisaver Homestart Changes: Hope For Auckland's First Home Buyers?
Recently the government announced an expansion to the eligibility for applicants in relation to KiwiSaver HomeStart grants.
From 1 August 2016 the income limits, for applicants to be eligible, increased from $80,000 to $85,000 for a single person and from $120,000 to $130,000 for a couple.
The house price limit for applicants has also increased from $600,000 to $650,000 in Auckland. Other regions of the country have also received a $50,000 increase to their relative house price caps.
The amount of the grants remains unchanged, being up to $5,000 for individuals and up to $10,000 for couples purchasing an existing property. First home buyers intending to build a new house may be eligible for a grant of up to $10,000 for individuals and up to $20,000 for couples. It should be noted that these grants are the maximum that can be applied for and eligibility will depend on how long a first home buyer has been contributing towards their KiwiSaver fund.
The rules applicable to withdrawing KiwiSaver funds remain unchanged – i.e. all KiwiSaver funds (provided members leave a minimum of $1,000 in their fund) can be withdrawn to purchase a first home if they have been contributing for a minimum of three years and intend to live in the property. Any funds transferred from an Australian Superannuation fund must also remain in the account.
There has been a lot of speculation in the media recently over whether, in fact, this expansion to eligibility is the best thing for first home buyers and easing the Auckland housing crisis. It has been noted that $650,000 is still around 6.5 times the average Auckland couple's income and, if the housing bubble were to burst and house prices fall, there may be cause for concern that a lot of people would be headed towards "financial ruin".
With the Unitary Plan broadly accepted, there is a keen interest to see whether this will alleviate the housing issues facing Aucklanders. However, whether the Unitary Plan will assist first home buyers is yet to be seen.
For more information about accessing your KiwiSaver funds or applying for the KiwiSaver HomeStart grant please contact Dan Maguire or one of our friendly team at Turner Hopkins.