CLIENT PORTAL
Paul Martin Chartered Accountant Ltd :: Accounting, Taxation and Business Advisory :: Auckland, New Zealand
CLIENT PORTAL

Good news for first-home buyers with wider eligibility for grants and loans

Paul Martin • April 19, 2021

It's a little easier to buy a first house after Government policy changes were introduced in March. The major change is that house price and income caps have increased, making a few more buyers eligible for the first home assistance and giving them more leeway on eligible properties.

What can first home buyers access?

Eligible Kiwis can make use of the First Home Grant and/or First Home Loan. They could potentially:

  • Buy an eligible property, below the price cap, with a 5% deposit.
  • Get a $10,000 grant per person for a new build, or $5,000 for an existing home.
  • Withdraw from their KiwiSaver account, potentially taking out all their funds except $1000.

You can find all the details here.

How do the new policies help?

The March 2021 policy changes help first home buyers in three ways:

  • Higher house price caps make more properties eligible for purchase using a First Home Grant and/or First Home Loan. The new caps are all $25,000 to $100,000 higher than the previous caps. They vary by region; you can see them all here.
  • New income caps make more Kiwis eligible for this assistance: the threshold for individuals is up by $10,000 to $95,000, while the cap for couples has risen by $20,000 to $150,000.
  • Property investment is now less attractive, after the removal of interest deductibility and extension of the bright line test. This will help reduce competition in the market, particularly for cheaper houses.

The Bank of Mum and Dad: how can you help?

Even with the new policies in place, it's tough to buy a first home, and many people rely on help from their families – the Bank of Mum and Dad is one of New Zealand's leading lenders.

Many of our clients have helped their kids buy first homes. There are several options to help, including gifts, guarantees and shared loans. Some of these can be complex, with far-reaching potential consequences (in the event of a relationship breakdown, for instance), and each choice should be weighed up carefully.

Please talk to us about the implications before you make a decision, as well as taking advice from a lawyer. We're happy to help. 

Are you heading away for a break from the business this year?

By Paul Martin • December 16, 2024
This time of year can be hard on small business. Your expenses continue and your cashflow can suffer when your debtors go on holiday.

Dealing with uncertainty - tips for business owners

By Paul Martin • November 5, 2024
Inflation may be down but there’s still real uncertainty for business owners.

How the new Government and coalition agreements might affect owners of residential rental properties

By Paul Martin • December 4, 2023
There were some key takeouts of interest to many of our clients from the recently signed coalition agreements between National, ACT and New Zealand First and the formation of the new Government. In particular there are a number of policies which will likely benefit landlord clients who own residential rentals. I have summarised some of these below. 1. Return of Interest deductibility for residential rental properties Interest deductibility for residential rental property owners will return. It will be phased back in over three tax years: • 2023/24 tax year: 60% of interest cost will be deductible. • 2024/25 tax year: 80% of interest cost will be deductible. • 2025/26 tax year: 100% of interest cost will be deductible. 2. Reduction in bright-line period National signalled in their pre-election campaign that the bright-line period for residential rental property sales would reduce from 10-years to 2-years. While the exact implementation of this policy is not yet known, it is good news on the horizon for residential property investors. 3. Reinstatement of 90-day no-cause termination notices The new government will reinstate 90-day no-cause tenancy termination notices. This will avoid many unnecessary disputes in the Tenancy Tribunal and gives landlords more confidence in letting to possibly “marginal tenants". Many landlords have avoided what they considered to be risky tenants because eviction for anti-social behaviour was so difficult. With this reinstatement, landlords might be more inclined to give a marginal tenant a chance because they know that if the tenant misbehaves, they won’t be stuck with them. If you would like more information on how these changes might affect your personal circumstances, please feel free to contact us to discuss further.
More Posts
Share by: