If you are a first-time home buyer, you may be eligible to receive a First Home Grant from Kainga Ora to put towards the purchase of your home.
These grants of up to $10,000 are provided by the New Zealand Government (through Kāinga Ora) and can assist you by topping up your deposit.
Who can get it?
To be eligible to receive the First Home Grant, you must:
- be at least 18 years of age;
- earn less than the specified income caps. The salary caps are currently:
- $95,000 or less for individual buyers;
- $150,000 or less for individual buyers with at least one dependent, and
- $150,000 for 2 or more buyers;
- have not previously owned any real estate, unlessyou have realisable assets worth less than 20% of the housing cap price for the area in which you are buying;
- have been contributing the minimum amount to your KiwiSaver complying fund or employer scheme, which is currently 3% of your total income;
- be purchasing a property that is under the regional price cap for the area in which the property is located;
- have a deposit of at least 5% of the purchase price of the house you intend to purchase (which can include First Home Grant funds); and
- agree to live in the property as your principal place of residence for least 6 months from the date of settlement.
In addition to the above eligibility criteria, you must be purchasing an equal share of the property if purchasing with other people. If purchasing privately, you must also provide evidence you bought the property at market value.
To learn more about the eligibility criteria, you can visit the Kāinga Ora eligibility criteria webpage here – Check you are eligible for First Home Grant :: Kāinga Ora – Homes and Communities (kaingaora.govt.nz)
How much are you eligible to receive?
Where you are purchasing an existing home, individuals may be eligible to receive a minimum of $3,000 and a maximum of $5,000. Couples may be eligible for up to $10,000.
If you are intending to purchase a new build or land, the amount of the First Home Grant doubles, as the Government promotes the construction of new homes. You can expect to receive a minimum of $6,000 for individuals and a maximum of $10,000 for new builds. Couples could receive up to $20,000.
When is a property considered a new build?
A property is considered a new build for the purposes of the First Home Grant if it falls into one of the following categories:
- It has received a building code compliance certificate less than 12 months before the date of your First Home Grant application.
- It is a vacant section that will be built on.
- House and land packages.
- Apartments and townhouses purchased off the plans.
Applying for the First Home Grant
Applications for the First Home Grant must be made directly to Kainga Ora. You can make the application be visiting the Kainga Ora website at https://kaingaora.govt.nz/home-ownership/first-home-grant/apply-for-the-first-home-grant/
Each person applying for the First Home Grant will need to complete an individual application form.
If more than one person is purchasing the property, then all purchasers’ details must be included in the application form, along with details of their income for the past 12 months. This is regardless of whether they are applying for the First Home Grant or not.
Once the application is submitted, Kāinga Ora requires a minimum of 20 working days to process the application. The processing time may be reduced to 10 working days if you have applied for a pre-approval (discussed further below). You should bear these processing times in mind when entering into a sale and purchase agreement.
If the First Home Grant funds do not arrive in time for settlement, you will still be obliged to go through with the purchase and could potentially lose your right to claim a First Home Grant in the future, as you are no longer considered a first-time buyer.
Once your application is approved
Kāinga Ora will provide your solicitor with the following documents once your application is approved:
- First Home Grant agreement. The agreement is the contract between you and Kāinga Ora and contains the terms that will govern the grant.
- Disclosure Statement for Consumer Credit Contracts. This statement sets out the key terms of the grant and is provided for compliance reasons.
The executed agreement together with a solicitor’s certificate must be submitted to Kāinga Ora no less than 5 working days prior to the date of settlement.
A solicitor’s certificate is required as it confirms that your solicitor has:
- positively identified you as the buyer;
- prepared and executed all the required documents correctly;
- has explained the agreement and disclosure statement to you; and
- agrees to only apply the funds towards the purchase upon settlement.
Get a pre-approval
We recommend you apply for a pre-approval to avoid uncertainty and to reduce your application processing time. A pre-approval is valid for up to 6 months from the date of approval.
To find out more about the pre-approval process, visit https://kaingaora.govt.nz/home-ownership/first-home-grant/apply-for-the-first-home-grant/
Documents required in support of your application
The documents that must accompany your application are also listed on the Kainga Ora website application page. To avoid any delays in the processing of your application, you should refer to the website for the list of supporting documents required at https://kaingaora.govt.nz/home-ownership/first-home-grant/apply-for-the-first-home-grant/apply-for-pre-approval-for-a-first-home-grant/
Get in touch
If you would like to discuss how the First Home Grant can assist you in the purchase of your home, get in touch with our expert property lawyers today.