Understanding KiwiSaver and first home subsidies

Saving a deposit for a house can be challenging for first home buyers, particularly in rapidly rising property markets where the amount you need is a continuously moving target.

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Don’t worry if you feel like it’s one step ahead and two steps backwards to start. Keep on with your plan and you’ll make headway eventually and be on the road to home ownership before you know it.

It’s not all hard slog – a number of funding options are offered by the Government to help reach your goal. Take a break from raiding the couch for loose change and see how these schemes could help you.


KiwiSaver contributors are eligible for a KiwiSaver HomeStart grant or KiwiSaver first home withdrawal after a membership of three years.

The KiwiSaver withdrawal would see you take out what you need for a deposit, provided you leave at least $1,000 in your KiwiSaver account.

The HomeStart grants are worth different amounts depending on your situation, and can be added to your savings to make up the 10% deposit of the sale price that is needed to buy using the KiwiSaver first home buyer scheme.

If you’re buying an existing home it can be between $3,000 and $5,000, based on $1,000 per year of KiwiSaver contributions.

If you choose to build or buy a brand new home, or land to build on. In this case, the grant is doubled to $2,000 per year of KiwiSaver membership, to a maximum of $10,000 for five years per member.

If you’re buying as a couple, or even as a group, your grant amount for a single dwelling is capped at $10,000 for an existing house or $20,000 for a new property.

To ensure the money is used for your house deposit (and not a jacuzzi), you won’t actually see the cash – it will be transferred straight to your solicitor from Housing New Zealand. You must also be aged over 18 and intend to live in the house for at least six months.

In certain circumstances, some home buyers who have bought before may be eligible to use KiwiSaver funds for their second home.


This scheme gives first home owners the chance to buy Housing New Zealand properties, usually located in provincial areas, using a grant of up to $20,000 to pay the deposit.

It’s ideal if you can make your mortgage payments but can’t save a deposit. Because of the high housing demand in New Zealand’s major centres, the FirstHome grant isn’t available in Auckland, Wellington City, Christchurch, Hamilton and Tauranga.

People who have previously owned property could be eligible for this programme if certain criteria are met.

Welcome Home Loan

If you take out a Welcome Home Loan you’ll only need a 10% deposit rather than the usual 20% required by most lenders.

The Welcome Home Loan is offered by a number of normal lenders including Westpac, and is supported by Housing New Zealand which underwrites the loan.

Criteria for this loan include being a first home buyer, living in the home you’re going to buy, and having a certain level of income.

How much you can borrow is capped, and this amount depends on where you live. For example, Aucklanders will have a higher cap than provincial residents.

See, we told you it wasn’t all hard slog.