The changes announced by Mr Key at the National Party’s Campaign Launch are projected to help about 90,000 lower and middle income first home buyers over the next five years – 40,000 more than would be helped under current policies.
“The policy will help tens of thousands more first home buyers achieve their dream of home ownership,” says Mr Key. “It will get young families started building what for most will be their biggest asset.”
“National backs young Kiwis who are disciplined, save up and want to put a deposit down on a house. National values home ownership. That’s because it provides stability for families, strength for communities and security in retirement.
“First home buyers have always found it hard, and often that first step is quite a stretch. That is why I believe the changes will be welcomed by potential first home buyers,” says Mr Key.
There are three major changes.
The first is replacing the current KiwiSaver First Home Deposit Subsidy with a KiwiSaver HomeStart Grant. This is a similar scheme, but has higher house price limits, and doubles the support for people who are buying or building a brand new home.
The second is allowing people to withdraw more money from their KiwiSaver account to use as a deposit on their first home. First home buyers will now be allowed to withdraw the Government’s annual contribution to their account – the member tax credit of up to $521 a year – as well as their own, and their employer’s, contributions.
Finally, more people will be able to get Welcome Home Loans, which means they require only a 10 per cent deposit to get a government-guaranteed loan. This will be achieved by making the Welcome Home Loan house price limits the same as those for the new KiwiSaver HomeStart Grant.
“Our changes will give a lot more people the confidence that if they join KiwiSaver and keep saving, they can put together a deposit on their first house,” says Mr Key.
The new policy will cost $218 million over the next five years.
The changes will take effect from 1 April next year.