The taxation (Kiwisaver, Homestart and Remedial Matters) Act 2015 came into effect on 1 April 2015 changing the Kiwisaver features available to first home buyers and now increasing the potential amounts available to first home buyers under the First Home Withdrawal scheme.
The Kiwisaver features available to first home buyers are the Kiwisaver Homestart Grant and the Kiwisaver First Home Withdrawal.
Kiwisaver First Home Withdrawal
Contribution to Kiwisaver for 3 years or more
- Eligible to withdraw all or part of your contributions to apply towards purchasing your first home.
- From 1 April 2015 Annual Member Tax Credits are also able to be withdrawn for first home purchase. Previously they were not. What is the Annual Member Tax Credit? It is simply a contribution from the Government of up to $521.00 per year depending on the amount of your Kiwisaver Contribution.
Kiwisaver Homestart Grant
Contribution to Kiwisaver for 3 years or more
- May also be entitled to a Kiwisaver Homestart Grant.
- Prior to 1 April 2015 the subsidy was $1,000.00 for each year of Kiwisaver contribution up to a maximum contribution amount of $5,000.00.
- From 1 April 2015 if you are purchasing a new home, a property bought off the plans or land to build a new home, the grant has doubled to $2,000.00 for each year of contribution up to a maximum amount of $10,000.00.
- There are also maximum purchase price limits in place as part of the eligibility criteria for the Kiwisaver Homestart Grant. From 1 April 2015 these limits have now been increased to $550,000.00 in Auckland, $450,000.00 in Hamilton, Tauranga, Western Bay of Plenty, Kapiti, Porirua, Hutt Valley, Wellington, Tasman, Nelson, Christchurch, Selwyn District, Waimakiriri and Queenstown and $350,000.00 for everywhere else in New Zealand.
This is just a summary of the main changes and increases in each of the above schemes and there are of course other criteria and requirements. Any first home buyer contributing to Kiwisaver should in the first instance contact their Kiwisaver provider for more detailed information. There is also helpful information online, for example at www.hnzc.co.nz.
We have extensive experience in all aspects of property law. We act for many first home buyers assisting them through the purchasing process including assistance with their Kiwisaver first home withdrawal and first home subsidy (now Kiwisaver Homestart Grant) applications. There are strict time frames that need to be adhered to under each of these applications which in turn need to tie in with any conditions in your purchase agreement. If you are a first home buyer eligible for these Kiwisaver subsidies then we strongly suggest you contact us prior to entering into any purchase agreement.
If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:
Solicitor: Simon Milne
smilne@farry.co.nz
09 379 0055 or 03 477 8870
The information contained in this publication is intended as a guide only. It does not constitute legal advice and should not be relied upon as such. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain.