Kiwisaver Updates – 1 April 2015

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Watch this space: OIO Consent process to be improved _________________________________ Assistance for OIO Process _________________________________ Have you received a letter from the Public Works Act acquisition _________________________________ Kiwisaver changes help home buyers get a foot in the door _________________________________ New Information Requirements When Buying or Selling Land _________________________________ Kiwisaver Updates – 1 April 2015 _________________________________ New Lending Restrictions in Force  _________________________________ Selling a Unit in a Small Body Corporate _________________________________ Kiwisaver and Your First Home Purchase _________________________________ Your Legal Property Checklist _________________________________ Real Estate Agents and REINZ Memberships _________________________________ GST On Land Transactions: Compulsory Zero-Rating _________________________________ The Status Of Land Can Impact On Its Value _________________________________ Fortune Manning Advises Manson Developments on Sale of Tower _________________________________ Amendments To The Residential Tenancies Act 1986 _________________________________ Property – Try Before You Buy _________________________________ The Changing Face of Real Estate Agreements _________________________________ Buying Real Estate off Plans? What to look for! _________________________________ Courses of Action Available to Tenant Where Landlord Refuses to Grant Renewal of Lease _________________________________ Residential Tenancies – What Landlords Need to Know _________________________________ Land Information Memorandum – A Useful Tool to the Residential Property Purchaser _________________________________ Open Home Theft _________________________________ Agent’s Duty to the Vendor Might Include and Obligation to Meet the Purchaser _________________________________ Driving Daisy Crazy – Shared Access Ways _________________________________ Buying Real Estate at Auction _________________________________ Tax Traps in Subdivisions

KiwiSaver Updates – 1 April 2015

Recent changes to KiwiSaver will mean that members of the KiwiSaver scheme looking to purchase their first home will be able to withdraw more of their KiwiSaver funds.

KiwiSaver First Home Withdrawal

If you have been a member of KiwiSaver for 3 years or more, you can apply to your KiwiSaver provider to withdraw funds to assist you in your first home purchase. As of 1 April 2015, your withdrawal can include your personal contributions, employer contributions as well as government contributions, such as member tax credits you have earned. Previously, member tax credits could not be withdrawn. Note, however, that the $1,000 kick start from the government still cannot be withdrawn. The member tax credit is paid to your KiwiSaver account automatically each year around July or August as long as you personally contribute at least $1,042.86 towards your KiwiSaver account each year. Other things to remember about KiwiSaver and your first home purchase:
  • There are no house price caps or income limits for the KiwiSaver first home withdrawal. However, there are house price caps relating to the KiwiSaver HomeStart Grant – more on that shortly.
  • You will need to apply to your provider and meet the criteria for a first home (or a second-chance) withdrawal. If you have already applied for your KiwiSaver withdrawal before 1 April 2015 for a purchase that is due to settle, you may need to reapply to withdraw additional contributions that you are now eligible for.
  • You cannot use KiwiSaver funds for payment of a deposit, but the amount of your KiwiSaver can be taken into consideration during your finance discussions with the bank. The KiwiSaver funds will be paid to your solicitor’s trust account on or prior to settlement.

KiwiSaver HomeStart Grant

The KiwiSaver HomeStart Grant, which has replaced the First Home Deposit Subsidy, is a grant available from Housing New Zealand if you meet certain eligibility criteria. As long as you meet the conditions of the HomeStart Grant, you are not obliged to repay the funds. Note that there are income thresholds ($80,000 before tax for an individual, $120,000 before tax for a couple) and house price limits, which vary by region, that will affect your eligibility.

If you are purchasing an existing home:

  • For each year of contribution to your KiwiSaver account, you can receive a HomeStart Grant of $1,000 – from a minimum of $3,000 to a maximum of $5,000 per person. This means that a couple purchasing an existing home can receive a HomeStart Grant of up to $10,000.

If you are purchasing a newly built home:

  • For each year of contribution to your KiwiSaver account, you can receive a HomeStart Grant of $2,000 – from a minimum of $6,000 to a maximum of $10,000 per person. This means that a couple purchasing a newly built home can receive a HomeStart Grant of up to $20,000.

House price caps have been increased as of 1 April 2015 to reflect the rise in house prices across New Zealand. You will only be eligible for a HomeStart Grant if the house you are purchasing is within the maximum house price cap.

Region Price Caps as of 1 April 2015
Auckland $550,000
Hamilton City, Tauranga City, Western Bay of Plenty District, Kapiti Coast District, Porirua City, Upper Hutt City, Hutt City, Wellington City, Nelson City, Tasman District, Waimakariri District, Christchurch City, Selwyn District, Queenstown Lakes District $450,000
Rest of New Zealand $350,000
Look through the KiwiSaver forms as early as possible to check that you will meet the eligibility criteria. Also, remember that specific time frames apply with respect to KiwiSaver applications – when submitting an offer on a property or negotiating an agreement prior to an auction, take care to allow enough time before settlement for processing of your KiwiSaver withdrawal applications. Talk to us when you find the right property and we can assist you in preparing an offer or negotiating changes to auction dates that will take your KiwiSaver requirements into account.