Government announce changes to KiwiBuild and home ownership products
Following the 4 September 2019 press release, the Government has announced new initiatives to help more New Zealanders into homes. These new initiatives will be achieved through what the Government is calling a “KiwiBuild Reset”.
At a glance, this KiwiBuild reset includes:
- new ways for people to become home owners, such as shared home ownership schemes
- a name change for the KiwiSaver HomeStart Grant: it will now be called the First Home Grant
- deposits being reduced to 5% for new and existing homes
- the First Home Grant can now be paid to all buyers subject to existing income caps
- occupation rules for owners of studio and one-bedroom apartments now being reduced from three years to one year
- the asset test for previous home owners or second chancers has been removed; and
- the three-bedroom or more KiwiBuild price cap for the Wellington Region will be increased to $550,000.
The numerical targets for KiwiBuild and the number of houses built under the programme are going. The focus is now “building as many homes as we can, as fast as we can in the right places”. And, a promised dashboard of statistics is to be published each month.
The Government will also be reducing the amount of taxpayer money put on the line to pay developers if they don’t sell properties they’ve tagged as “KiwiBuild”. Put another way, the Government is reducing the previous amounts offered to encourage developers to build houses that meet the KiwiBuild criteria.
But to benefit developers, to make up for the reduction of amounts, the Government is giving developers the option of selling some more expensive, larger houses to KiwiBuild buyers.
On the buyers’ side, the Government is trying to broaden the pool of people eligible to buy KiwiBuild houses by making it easier for people who have owned houses in the past to qualify. In addition, the Government is reducing the amount of time owners of one-bedroom studio apartments need to live in their properties before selling from three years to one year.
Further, the asset test for “second chancers”, or people who have previously owned homes, will be done away with all together. Currently, second chancers can’t have assets worth more than 20% of the relevant First Home Grant price cap for an existing home. Looking ahead, there will be no asset limit. However, these “second chancers” still cannot currently own a home and must meet other criteria including an income test.
These changes come into effect on 1 October 2019.
Should you wish to discuss any of the above and how it may affect you, please contact Melissa Blackwell (DDI: 09 913 2254; m................@glaister.co.nz) and Stephanie Harris (DDI: 09 356 8232; s...............@glaister.co.nz)