On 19 May 2022 the Minister of Finance, Hon. Grant Robertson delivered New Zealand’s 2022 Budget that included changes to the following First Home products: the First Home Grant, First Home Loan and the Kāinga Whenua Loan scheme.
The changes to the First Home Grant took effect from 19 May 2022 and the changes to the First Home Loan and Kāinga Whenua Loan took effect from 1 June 2022. Housing Minister Dr Megan Woods (“Dr Woods”) stated that: “We are increasing the house price caps for the First Home Grant to align with lower quartile market values for new and existing properties. This recognises the changes in house prices over the past year,”. The Government has also removed house price caps from the First Home Loan, this provides eligible applicants with a greater choice of properties, however income caps and lender requirements will still apply to ensure that the First Home Loan is being used by buyers who need support for a first home.
House price and income caps are to be reviewed every six months to ensure that they continue to stay up to date. Changes to First Home Grant in summary:
- House price caps increased, to align with lower quartile estimated values for new and existing properties
- KiwiSaver contribution requirements adjusted, to reduce the threshold amount of regular savings to access the grant.
- New income cap category introduced for ‘individual buyers with dependents’, with an income cap of $150,000.
- Relocatable homes that have received a Code Compliance Certificate in the last 12 months can qualify as new properties.
- Members of eligible Progressive Home Ownership rent-to-buy schemes can access the grant amount for new builds.
The changes to the eligibility criteria include the introduction of a new income cap category for individual buyers with dependents, and adjusting the KiwiSaver contribution requirements for the First Home Grant. Dr Woods stated that “We estimate that these changes, along with other changes to the eligibility criteria, will help thousands more first home buyers, with funding available for approximately 7,000 extra First Home Grants and 2,500 extra First Home Loans available every year.” Changes to First Home Loan in summary:
- House price caps removed altogether (income caps and lender requirements still apply), to provide applicants with a greater choice of properties.
- New income cap category introduced for ‘individual buyers with dependents’, with an income cap of $150,000
The Government also announced a change to the Kāinga Whenua Loan scheme, increasing the loan cap. Associate Housing Minister (Māori Housing) Peeni Henare said this change will make a real difference for whanau; “Unlocking funding support to help people into homes will reconnect them with their whenua.” Further that “We made a promise as a government to change the status quo when it comes to Māori housing, and providing more funding options for whānau looking to utilise whenua Māori as effectively as possible is a vital part of that work,”. Kāinga Ora’s Jason Lovell, Manager of Home Ownership Products, says the announcement supports Kāinga Ora to continue helping more whānau into their first home. The change to the Kāinga Whenua Loan scheme in summary:
- Loan cap has increased from $200,000 to $500,000, to provide more choice and opportunities for people building, relocating, or purchasing a home on whenua Māori. A deposit of 15% of every dollar borrowed over $200,000 is required.