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July 09 newsletterKiwiSaver First Home Deposit
The benefits of KiwiSaver keep coming.
Be in KiwiSaver for a few years and other tax payers will help you into your first home. Sounds too good to be true? Now that depends on your expectations. First up, it is for your own private residence and not the beginning of your rental empire.
There are actually two parts to this option.
Withdrawals and the Deposit Subsidy
After three years KiwiSaver service, you can withdraw the contributions that you and your employer have made. Government contributions such as the member tax credit and the $1,000 kick start are excluded.
In addition, the tax payers will give you another $1,000 for each year you have been contributing to KiwiSaver up to a maximum of $5,000. For a couple, this can be $10,000. The catch here is that again it is after three years membership but you also needed to have contributed a minimum of 2% of your income.
Who will be eligible?
This is designed to assist first home buyers into their first home. However, it does recognise that financial circumstances change. For example, you may qualify for the deposit subsidy after a separation if you are in the “same financial position” as a first home buyer.
The deposit subsidy is administered by Housing New Zealand. Together with a Welcome Home Loan you could be in your own home next year. Or have your children into their first home without you contributing a bean.