What was the First Home Grant?
The First Home Grant was a government initiative that provided eligible buyers with free money to put toward their house deposit. Because it was a grant (not a loan), it did not need to be repaid provided the buyers met the residency conditions.
- When purchasing an existing property, eligible buyers could get up to $5,000 towards their deposit.
- When purchasing a brand-new build or buying land to build on, eligible buyers could get up to $10,000 towards their deposit.
Could it be used with the Kāinga Ora First Home Loan?
Yes. If a buyer was eligible for both schemes, the grant money could be used to help make up the 5% deposit required for the First Home Loan.
Who was eligible?
To qualify for the grant, applicants had to meet strict criteria. They needed to be:
- Over 18 years old.
- Buying an owner-occupied property (it could not be used for investment properties).
- A first-home buyer who had never owned property in New Zealand before (or an approved Second Chance buyer). Owning exclusively Māori land was exempt.
- Someone who had been making regular minimum contributions to their KiwiSaver for at least three years.
There were also strict income caps based on the previous 12 months of Inland Revenue (IRD) income summaries:
- Single buyers with no dependants: Could earn no more than $95,000 before tax.
- Couples, or single buyers with dependants: Could earn a combined maximum of $150,000 before tax.
What were the House Price Caps?
To ensure the grant was going to entry-level buyers, Kāinga Ora enforced regional house price caps. These caps dictated the absolute maximum amount a buyer was allowed to pay for a house while still receiving the grant.
If a buyer purchased a house for even one dollar over the regional cap, they lost the entire grant. For example, the final house price cap for an existing house in the Wellington region was $750,000. A house bought at $720,000 met the criteria, but a house bought for $780,000 did not.
Were there any downsides to the grant?
The main restriction was the residency requirement. By accepting the grant, buyers legally committed to living in the property as their primary residence for a minimum of six months from the settlement date. If their circumstances suddenly changed—for example, they had to move overseas for work or sell the house within that six-month window—they were legally required to repay the grant money to the government.
