First time buying a property with subsidy

[celeliza]

Hi,

I am hoping to purchase a property here in Auckland one day possibility with some help of getting the Kiwi Saver “first home” subsidy.

Last September, I became a NZ resident so I cannot meet this criteria until I have been a member for three years (in Sept 2014), when I can withdraw as a deposit.

I don’t know if I can wait that long but does anyone know if it’s really worth taking that option? I have my own savings back in the UK that I plan to use.

Any suggestions would be greatly appreciated.

Cheers,

Claire

[spaceman]

I would argue in the 3 years that it takes for you to qualify the prices will have increased past any benefit to you and you'll be worse off.

BUY NOW!!!!!

Cheers
Spaceman

[LondonKiwi]

Having lived outside of NZ for the last 12 years I am not up to speed with the amount of the kiwi saver first home subsidy but I would suggest that as we have come through the "supposed" bottom of this property cycle, and if you buy in the "right" area there is a good chance that the increase in capital gains that you could achieved in 2014 on a property purchased now will exceed the value of the subsidy in 2014.

There is a strange set-up over here in Aus whereby the Govt offers a one-off first home owners allowance of $7000 and yet you have to pay stamp duty on every purchase. On an 800K property you will have to pay circa $30K stamp duty.

So they give you $7k on one hand but charge you $30k on the other. We have it good in NZ!!

[Maccachic]

Isn't the kiwisaver subsidy just access to your retirement savings for the purpose of buying your first home? Its says on the website you can claim $1000 for each year you have been a member up to $5000.

[Ivan McIntosh]

Yes Maccachic, so its only out of what you've saved. Of course, if you've just joined recently then most of what is in it may be the government kick-start contribution.

I have to agree with Spaceman. Even if you just assume a 1% increase per annum that's nine thousand in three years on just a $300k property. If you want to own a home, you might as well get started....

[Nick Alcock]

Yes Maccachic, so its only out of what you've saved. Of course, if you've just joined recently then most of what is in it may be the government kick-start contribution.

Those are 2 different things, both only valid after 3 years in Kiwisaver.

You can withdraw your contributions and your employers contributions to put towards the deposit of a house. You can never withdraw the government contributions including the $1000 kickstart until retirement.

On top of that you can apply for a government subsidy for $1000 per year up to a max of 5 years. But that doesn't come out of your Kiwisaver

[One]

Isn't the kiwisaver subsidy just access to your retirement savings for the purpose of buying your first home? Its says on the website you can claim $1000 for each year you have been a member up to $5000.

No. You can access your savings AS WELL AS the subsidy, but the subsidy is extra on top of what you've saved. Basically, the govt will give you an extra 3000 bucks after 3 years to buy your first home with. But yeah, it sounds like prices in Auckland could well be more than 3000 higher in 3 years.

Celeliza, the other spanner in the works is the exchange rate. It's a dreadful time to transfer your savings from the UK. Of course, it might be even worse in 3 years ...

[Onsprada]

Note if you plan to wait 3 yrs to use your kiwisaver:
1) You cannot purchase any property above $400k in Auckland, Wellington or Queenstown
2) You cannot purchase any property above $300 in any other area
3) You cannot purchase any property for investment purposes
4) You must live in the property for at least 6 months

[KatieR]

It isn't worth waiting for- the amount is a very small part of a home deposit, and there are too many restrictions. Also- there will probably not be a pension as we know it if you are under 40, so you may need that money later....