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Important KiwiSaver changes for first home buyers

During the 2014 election campaign, National indicated that they would be making changes to KiwiSaver’s benefits for first home buyers. Among these KiwiSaver changes are the below:

ALLOWING ACCESS TO MEMBER TAX CREDITS   (the Govt annual contribution top-up)

Members making a first home withdrawal will be able to withdraw any member tax credits they’ve accumulated, in addition to any employee, employer or voluntary contributions (although the $1000 kickstart will still be excluded).

KIWISAVER CHANGES FOR HOMESTART GRANT

The First Home Deposit Subsidy will be replaced by the KiwiSaver HomeStart Grant, which doubles the support given to members who are buying a newly built home.
Members buying an existing home can still receive a contribution, this is up to $1,000 for each year of membership, up to a maximum of 5 years. For members buying a newly built home, this is doubled to $2,000 for each year of membership, up to a maximum of 5 years – $10,000 (however income and house price caps still apply).

INCREASED HOUSE PRICE CAPS FOR HOMESTART GRANT AND WELCOME HOME LOANS

$550,000 = Auckland:
$450,000 = Wellington, Queenstown, Christchurch, Selwyn District, Hamilton, Tauranga, Western Bay of    Plenty, Kapiti Coast, Upper Hutt, Hutt City, Porirua, Tasman, Nelson & Waimakariri:
$350,000 = All other areas: 

These KiwiSaver changes are scheduled to take effect from 1 April 2015. The HomeStart Grant and increased house price caps won’t require any new legislation, but allowing access to member tax credits as part of a first home withdrawal will require changes to the KiwiSaver Act. A Bill to allow this is currently before Parliament, but it hasn’t yet passed – we’ll keep you updated when we know more. Do you have questions about these KiwiSaver changes or your KiwiSaver account? Get in touch with us here.