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First home purchaser series - Part 1: The deposit

By - 23 Jul 2019

For many people trying to purchase their first home, getting together a deposit is often a daunting thought that may seem unattainable. There are, however, a number of resources that you can tap into to help get you to that ever important point where you can move from paying your landlord's mortgage to paying your own.

KiwiSaver First Home Withdrawal

As at June 2018, 2.9 million people were enrolled in KiwiSaver saving toward their retirement. While this is often seen as the purpose of your KiwiSaver fund, the Government allows for a one off withdrawal from your account to transfer your savings into an asset, namely your own home. You can withdraw all of your KiwiSaver account, less $1,000 which must remain. This can be used towards a deposit and may provide a great head start to your deposit savings. These funds will be released from your KiwiSaver provider to a trust account only when you are ready to pay the deposit and will then be paid directly to the vendor or real estate agent.

Housing New Zealand HomeStart Grant

Although being a KiwiSaver member for at least three years is a requirement for the HomeStart Grant, this is a lump sum payout from the Government which can be used toward your first home and yes, you can put this towards a deposit.

Depending on the property you are planning on purchasing, your time in KiwiSaver, and the number of people buying the property, you may get up to $20,000 towards your purchase. Again this can be used toward your deposit. For the full eligibility criteria, visit the Housing New Zealand website.

It can take up to 20 working days to withdraw your KiwiSaver or HomeStart funds and therefore it may be prudent for you to obtain pre-approval for these funds so they are available once the deposit is payable.

Help from Parents or a Relative

For some people, receiving money from parents, or another relative, is a way for them to help get their deposit together. It is important to document this correctly, not only to ensure you remain eligible for the HomeStart Grant, but also to protect the lender's interest should your circumstances change. For more on this see our previous article on protecting your gift.

If you are looking to buy your first home, but unsure of how to access to these types of assistance, get in touch with a member of our property team today. The earlier we get involved, the smoother we can make the process for you.


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