buying your first home with kiwisaver 2013

8/12/2019 Buying Your First Home With Kiwisaver 2013

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Buying your rst homewith KiwiSaver


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KiwiSaver helping you into home ownershipKiwiSaver is a voluntary, work-basedsavings initiative to help you with yourlong-term saving for retirement. It has arange of membership benets includingcontributions from your employer and theGovernment, as well as help with buyingyour rst home.

KiwiSaver has two features to help you buyyour rst home: The KiwiSaver rst-homedeposit subsidy, and the KiwiSaverrst-home savings withdrawal. Both ofthese features can also be used to helpwith the overall deposit when buying landto build a house on.

Members of complying funds and exemptemployer schemes may also be eligible.You should contact your complying fundtrustees to nd out if this is possible.

If you are a previous home owner but in

a similar nancial position to a rst-homebuyer, you may also be eligible forboth features.

The deposit subsidy is administered byHousing New Zealand and the savingswithdrawal by your scheme provider.Housing New Zealands role in the savings

withdrawal is to determine if you qualifyas a previous home owner.

See the table below to determine what willbe best for you and where to look in thisbooklet for more information.

We recommend that before you apply fora deposit subsidy or a savings withdrawal,you re-familiarise yourself with KiwiSaver.It would be helpful to check what type ofscheme you belong to, who your scheme

provider is, how long you have beencontributing to the scheme and how muchyou have been contributing.

This will help with your application for adeposit subsidy and savings withdrawal.You can talk to your employer, check anystatements you may have received fromyour provider, or talk to KiwiSaver directon 0800 549 472 .

If you are not a member of KiwiSaverand would like to join eithercall 0800 549 472 ,or visit www.kiwisaver.govt.nz

I AM A FIRSTHOME BUYER

I want to apply for the rst-homedeposit subsidy. Apply to HousingNew Zealand. See page 6 to ndout how.

I want to apply for the savingswithdrawal. You apply through yourscheme provider. See page 9 to ndout how.

I AM APREVIOUSHOMEOWNER

I want to apply for the rst-homedeposit subsidy. You apply toHousing New Zealand and HousingNew Zealand determines if you are inthe same position as a rst homebuyer. See page 7 to nd out how.

I want to apply for savings withdrawal.You apply through your schemeprovider, but rst you need HousingNew Zealand to determine if you are inthe same position as a rst home buyer.See page 10 to nd out how.


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KiwiSaver rst-homedeposit subsidyHow does the deposit subsidy work?

After three years of regularlycontributing to KiwiSaver you may beentitled to the deposit subsidy.

You can apply for the deposit subsidy ifyou have belonged and contributed to aKiwiSaver scheme, complying fund orexempt employer scheme for at leastthree years.

The subsidy is $1,000 for each year ofcontribution to the scheme:

3 years of contributing = $3,000(the minimum you can get)

4 years of contributing = $4,000

5 years of contributing = $5,000(the maximum you can get)

You can use the deposit subsidy if youare buying an existing house, or land tobuild a residential property on. There isa maximum amount on how much thehome and land combined can cost.There are other eligibility criteria tomeet, see page 5 for more details.

Housing New Zealand will pay thedeposit subsidy directly to your solicitorsettling the purchase of the house orland on settlement day. Please note thatthe subsidy cannot be paid out after thesettlement has occurred, therefore if youdo not submit your application withinthe stipulated timeframes, you may notbe entitled to the subsidy.

Applications should be sent to HousingNew Zealand no later than four weeksbefore settlement.

If you live in the house you have boughtfor a minimum of six months, thesubsidy is yours to keep. If you move outbefore six months, you will be requiredto pay the subsidy back.

You can also buy a property with otherpeople even if they are not KiwiSavermembers. You may all qualify for adeposit subsidy, if they are members.

You can only receive the depositsubsidy once.


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How do I apply for the KiwiSaverdeposit subsidy?

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Step one:

Check you are eligible for the deposit subsidy

I am 18 years or over.

I have not received the depositsubsidy before.

I am a member of a KiwiSaverscheme, complying fund or exemptemployer scheme (contact yourscheme provider to check yourscheme is eligible).

I have contributed at least theminimum percentage of my income toa KiwiSaver scheme, complying fundor exempt employer scheme for at

least three years. (From 1 April 2013,the minimum contribution wasincreased to 3 percent of your income,3 percent of the minimum wage fornon-earners or 3 percent of youryearly benet for beneciaries. From1 July 2007 to 31 March 2009 theminimum contribution was 4 percent,and from 1 April 200931 March 2013it was reduced to 2 percent).

I am the sole buyer and I have earned$80,000 or less (before tax) in thelast 12 months.

We are two or more buyers and ourcombined household income for thelast 12 months is $120,000 or less(before tax)

I have a deposit that is 10 percentor more of the purchase price.The 10 percent deposit includes themoney you can withdraw through

the KiwiSaver savings withdrawalfeature, the deposit subsidy amountyou may be eligible for and any otherfunds, such as savings, xed andterm deposits or funds already paidto a real estate agent. The depositcan also be gifted by a relative witha gifting certicate.

I am buying one of the following

types of property and landarrangements: fee simple stratum estate freehold

and leasehold cross-lease (freehold

and leasehold) leasehold.

(For more information on theseproperty types read the glossaryat the back of this booklet, contactHousing New Zealand or talk toyour lawyer.)


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Step two:

Check that the property you want to buy is also eligible

If you are buying a house, the house alsoneeds to meet the following criteria.(If you are buying land to build on,ignore this step, and go to step three).

It will be my only house. (You cannotown any other houses).

The house is within the maximumhouse price caps. The house pricecaps are Auckland $485,000 Wellington City and

Queenstown Lakes $425,000

Christchurch City andSelwyn District $400,000

Thames/Coromandel, HamiltonCity, Western Bay of Plenty,

Tauranga City, Kapiti Coast ,Porirua City, Hutt City, UpperHutt, Tasman/Nelson, andWaimakariri $350,000

Rest of New Zealand $300,000 .

I am planning to live in the house Ibuy. (The deposit subsidy cannot beused to buy an investment property.)


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Step three:

If you are buying land and planning to build a houseon it, check you meet the following criteria

(Please note this does not apply if youare buying an already built house. Onlyuse this step if you are buying land to

build on.) I will have the house built within

12 months of purchase of the land.(You will need to supply a codecompliance certicate to show thatthis has been done.)

I will live in the house for at leastsix months from the date the codecompliance certicate is issued.

I will have funding for theconstruction of the building.

I can provide the construction costsfor the building of the property withmy application for the deposit subsidy.

The total cost of both the land andthe house is within the house pricecaps. The house price caps are: Auckland $485,000 Wellington City and Queenstown

Lakes $425,000 Christchurch City and Selwyn

District $400,000 Thames/Coromandel, Hamilton

City, Western Bay of Plenty,Tauranga City, Kapiti Coast ,

Porirua City, Hutt City, UpperHutt, Tasman/Nelson, andWaimakariri $350,000


The land or site is ready to build on.


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Step four:

Apply to Housing New Zealand

If you meet the conditions of the stepsabove, there are two ways to apply,depending on your circumstances:

1. Apply for a pre-approval if you have

not found a house or land to buildon, but want to nd out if you areeligible before you start house/landhunting. The pre-approval expiresafter 180 days.

2. Skip that process and apply for thedeposit subsidy directly if you havealready found a house or land, andhave a sale and purchase agreement.

You can apply for both pre-approvalor the deposit subsidy directly on theapplication form. Please note thatHousing New Zealand requires atleast four weeks from submitting anapplication through to paying out thedeposit subsidy to your lawyer.

Applications submitted for the depositsubsidy with a signed sale and purchaseagreement must be submitted at leastfour weeks before settlement date.Applications that do not provide therequired four weeks notice, may notbe accepted and therefore the depositsubsidy may not be paid out. Thesubsidy will not be paid out aftersettlement has occurred.

If you would like an application form ormore information: Visit www.hnzc.co.nz/kiwisaver Email [email protected] Call 0508 935 266


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Im a previous home owner can I still get the deposit subsidy?

If you are a previous home owner but in a similar nancial position to a rst-homebuyer, in terms of income and realisable assets, you may still be eligible for thedeposit subsidy. Housing New Zealand will determine this.

You will rst need to meet the general criteria for the deposit subsidy these are insteps one to three on pages 3 and 5. If you do qualify, then run through the checklistbelow this only applies to previous home owners.

I have not received the rst-homedeposit subsidy before.

I do not have realisable assetstotalling more than 20 percent of thehouse price cap for the area I ambuying in. Realisable assets arebelongings that you can sell to helpbuy a home.

The asset caps for each region are: Auckland $97,000 Wellington City and

Queenstown Lakes $85,000 Christchurch City and

Selwyn District $80,000 Thames/Coromandel, Hamilton

City, Western Bay of Plenty,Tauranga City, Kapiti Coast ,Porirua City, Hutt City, Upper Hutt,Tasman/Nelson, and Waimakariri $70,000


Housing New Zealand considers thefollowing to be realisable assets: money in bank accounts (including

xed and term deposits) shares, stocks and bonds investments in banks or nancial

institutions any money paid to, or held by

the real estate agent as a depositon a home

boat or caravan (if the value isover $5,000)

other vehicles (such as classicmotorbikes or cars notbeing used as your usualmethod of transport)

other assets valued over $5,000.


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How do I apply?

Applying as a previous home owner is the same as for rst-home buyers.There is just an extra section on the application form to complete with detailsof any realisable assets you may have.


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KiwiSaver rst-homewithdrawalHow does the rst-home withdrawal work?

If you have been a member of KiwiSaverfor at least three years, you may be ableto withdraw all, or part, of your savingsto put towards buying your rst home.

Government contributions are not paidout in the rst-home withdrawal. Thisincludes the $1,000 kick-start when yourst join.

You must intend to live in the property.It cannot be used to buy an investmentproperty.

If you are a member of a complyingfund, you may be able to withdraw yoursavings to help you buy your rst home.Not all complying funds permitwithdrawals for this purpose, so you will

need to discuss this with the trustees ofyour complying fund.

What do I need to do to apply for a rst-home withdrawal?

If you are a rst-home buyer, please

contact your KiwiSaver provider orcomplying fund provider to apply. If youare a previous home owner you will still

need to apply through your scheme

provider, however Housing New Zealandwill need to determine whether youmeet the eligibility criteria (see page 10).


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Im a previous home owner can I still get the rst-home withdrawal?

As a previous home owner you may still be eligible for a savings withdrawal.You will still have to apply through your scheme provider, however, rst youneed Housing New Zealand to determine whether you are eligible as a previoushome owner.

Run through the checklist below to seeif you qualify:

I have not received the savingswithdrawal before.

I have been a member of KiwiSaverfor at least three years.

I have previously owned a home, butno longer have a share in a property.

I do not have realisable assetstotalling more than 20 percent of the

house price cap for the area I ambuying in. Realisable assets arebelongings that you can sell to helpbuy a house. For example if you werebuying a house in the $300,000house price cap area, your realisableassets cannot be worth more than$60,000. Housing New Zealandconsiders the following to berealisable assets: money in bank accounts (including

xed and term deposits) shares, stocks and bonds investments in banks or nancial

institutions any money paid to, or held by the

real estate agent as a deposit ona home

boat or caravan (if the valueis over $5,000)

other vehicles (such as classicmotorbikes or cars notbeing used as your usualmethod of transport)

other assets valued over $5,000.

I am the sole buyer and I have earned$80,000 or less (before tax) in thelast 12 months

We are two or more buyers and ourcombined household income for thelast 12 months is $120,000 or less(before tax).

To get Housing New Zealand to determinewhether you are eligible, complete anapplication form. You can use the sameform as the deposit subsidy just tick thebox for the savings withdrawal.

If you would like an application form ormore information: Visit www.hnzc.co.nz/kiwisaver Email [email protected] Call 0508 935 266


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Other home ownership assistance

You may be able to use a Welcome HomeLoan with the KiwiSaver home ownershipproducts. To nd out more aboutthe Welcome Home Loan visitwww.welcomehomeloan.co.nz where youwill nd a list of lenders who you can call.

You may also be able to use theKinga Whenua loan to own a home onmultiple-owned Mori land. For moreinformation about Kinga Whenua visit www.hnzc.co.nz or call 0508 935 266.


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Glossary of terms

KiwiSaver rst-home deposit subsidy

(deposit subsidy)You need to have been contributingregularly for a minimum of three years ina KiwiSaver scheme, complying fund, orexempt employer scheme to be eligiblefor the deposit subsidy.

The subsidy is payment of $1,000 foreach year of contribution to your KiwiSaverscheme account, complying funds orexempt employer scheme up to a maximumof $5,000, after you have contributed forve years.

See this booklet for the conditions thatyou have to meet to be eligible for thedeposit subsidy.

KiwiSaver rst-home withdrawal(savings withdrawal)

You need to have been in a KiwiSaverscheme or complying fund for a minimumof three years.

The savings withdrawal allows you towithdraw all, or part, of your savings to puttowards buying your rst home.

Government contributions are not paid out

in the savings withdrawal. This includes the$1,000 kick-start when you rst join.

See this booklet for the conditions thatyou have to meet to be eligible for thesavings withdrawal.

KiwiSaver scheme

Retirement savings scheme providingmembers with a $1,000 kick-startand annual member tax credits fromthe Government.

Members choose to pay 3 percent,

4 percent or 8 percent of salary or wagesand the employer is required to pay3 percent. The scheme name will includethe word KiwiSaver.

Complying fund

A registered employer-sponsoredsuperannuation fund which allowsmembers to choose to lock in a speciedpercentage of their salary into an accountwhich can only be accessed on the sameterms as for a KiwiSaver scheme. Themember may also continue to contributeto an unlocked account. You do not get a$1,000 kick-start contribution from theGovernment when you sign up. Not allcomplying funds permit withdrawals forthe purpose of buying your rst home.So you will need to discuss with the

trustees of your complying fund.

Exempt employer scheme

An employer-sponsored superannuationscheme which does not require a memberto lock in any member contributions asrequired by KiwiSaver schemes but doesprovide members with access to thedeposit subsidy. New employees will be

offered this scheme instead of KiwiSaverwhen they join the employer. They do notget the Government $1,000 kick-startcontribution or annual member tax credits.

First-home buyer(s)

First-home buyer(s) is an individual orgroup of individuals who have not owneda house before.

Previous home owner

An individual or group of individuals whohave previously owned a house/land.


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They may be eligible for the depositsubsidy and savings withdrawal ifthey meet certain conditions regardingtheir ownership of assets and their levelof income.

Minimum contributions

A minimum contribution is the lowestpercentage of your income or benet thatyou can contribute to your KiwiSaveraccount and qualify for the deposit subsidy.From 1 July 2007 to 31 March 2009 theminimum contribution was 4 percent ofyour income, 4 percent of minimum wagefor non-earners or 4 percent of your yearlybenet for beneciaries. From 1 April2009, the minimum contribution wasreduced to 2 percent of your income,2 percent of minimum wage for non-earners or 2 percent of your yearly benetfor beneciaries. From 1 April 2013, theminimum contribution was increased to3 percent of your income, 3 percent ofthe minimum wage for non-earners or3 percent of your yearly benet for

beneciaries. The contribution periodsmay change. For example you may havebeen a paid employee for one year, andthen self-employed for two years. This isacceptable as long as you werecontributing the minimum contributionduring both those periods, and they bothadd up to at least three years. Thisthree-year period can be longer thana calendar period, but must add up tothree years.

Fee simple title

Owners of the land are entitled tounrestricted use of the land and maydispose of the land in any way they wish(subject to the relevant laws).

Stratum estate freehold and leaseholdtitle

Common type of ownership forapartments. An undivided portion of

a larger property is owned collectively anda smaller portion (the apartment or unit)is owned exclusively.

Cross-lease (freehold and leasehold) title

Ownership of the land is shared and

each owner leases their house from theother landowners. The cross-leaseagreement outlines the rights andobligations of each owner.

Leasehold land title

The owner of the land with a fee simpletitle enters into a legal agreement (lease)to transfer the right to use the land toanother person for a certain amount oftime. The lease will detail the conditionsincluding payment of rent to the landownerand the lease may be registered againstthe land title.

Pre-approval

Pre-approval happens if you have not founda house or land to build on, but want to ndout if you are eligible before you starthouse/land hunting. Pre-approval is validfor 180 days.

Realisable assets

Realisable assets are belongings that youcan sell to help buy a house. This caninclude savings, shares, land, boats andmotor vehicles. See page 7 for a list of itemsthat Housing New Zealand considers to berealisable assets and that can affect anapplication from a previous home owner.

Code compliance certicate

A code compliance certicate is acerticate under the Building Act thatshows that building work has beencompleted against an application for abuilding consent you have built what

you have said you would build.


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Notes


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To nd out more about buying

your rst home with KiwiSaver,

visit www.hnzc.co.nz/kiwisaveremail [email protected] call 0508 935 266 .

The information contained in this brochure is intended to help you understand the KiwiSaver deposit subsidy andKiwiSaver savings withdrawal and is indicative only. It is not intended to address the specic circumstances of anyparticular individual or entity. All reasonable steps have been taken to ensure the quality and accuracy of theinformation. The eligibility criteria or other policies applicable to the deposit subsidy or savings withdrawal may bechanged, deleted, added to or otherwise amended without notice. The information contained in this brochure shouldnot be construed as legal or professional advice and you should take advice from qualied professional people.

buying your first home with kiwisaver 2013

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