Changes to KiwiSaver withdrawal rules for buying a home will make it easier for second-chance homeowners, Building and Housing Minister Dr Nick Smith says.
Dr Smith today released the first full year results of the HomeStart scheme, which showed it has helped 11,943 people into their first home with grants of $55.6 million; about double the number and value taken up under the more narrow previous scheme the year before.
The $435 million HomeStart scheme, which came into effect on 1 April 2015 to replace the KiwiSaver First Home Deposit Subsidy, has been projected to help 90,000 people over five years.
“The government is tweaking one aspect of the KiwiSaver home buyer programme in response to feedback in respect of second-chance home owners,” Dr Smith said.
“The current scheme limits KiwiSaver withdrawals to first home buyers and people who have previously owned property but have low assets and earnings. The asset limit is twenty percent of the house price caps of $550,000, $450,000 and $350,000, and the income limit is $120,000 for a couple and $80,000 for an individual.
“The income limits are being removed on 1 July 2016, meaning a second-chance homeowner whose assets are small will be able to access their KiwiSaver funds to buy a home regardless of how high their income is.
“This change will help many thousands of mid-life, middle-income New Zealanders who have been through a separation or business failure and are struggling to get back into home ownership by enabling them to access their KiwiSaver funds.”
Dr Smith said HomeStart was part of a wider programme of work the government had under way to help more people into owning their own home, such as freeing up more land faster and initiatives to constrain building material costs and cut compliance costs.
“The government is deliberately screwing the scrum in the property market in favour of the first home buyer and owner occupier, with the HomeStart grants and KiwiSaver withdrawal scheme. Property investors are facing tougher loan-to-value ratios and tighter tax rules, as well as new landlord obligations on insulation and standards.”