Budget 2022: Changes announced for first home products

The changes were announced as part of Budget 2022, and involve the First Home Grant, First Home Loan and the Kāinga Whenua Loan scheme.

House price caps for the First Home Grant have increased for many places throughout the country, to align with the current market. The Government is also removing house price caps entirely from the First Home Loan, to provide eligible applicants with a greater choice of properties (income caps and lender requirements still apply).

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.

Kāinga Ora Manager Home Ownership Products, Jason Lovell, says today’s announcement supports Kāinga Ora to continue helping more whānau into their first home.

"Kāinga Ora is committed to enabling New Zealanders to step on to the home ownership ladder, through the range of financial products we administer on behalf of the Government.

"The changes announced today open these products up to more people, which means we can help a new cohort of prospective first home buyers who previously may not have been able to access this support.

"We look forward to assisting more individuals and whānau on their journey to home ownership."

The Government also announced a change to the Kāinga Whenua Loan scheme. The loan cap will be 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.

Changes to the First Home Grant take effect immediately. Changes to the First Home Loan and Kāinga Whenua Loan are expected to take effect from 1 June 2022.

It is also important to note that Kāinga Ora is not a lender, therefore applicants will still need to meet the lending requirements of a participating bank or lender.

In summary

Changes to First Home Grant:

• House price caps increased, to align with lower quartile estimated values for new and existing properties. View the new house price caps.
• 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.

Changes to First Home Loan:

• 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.

Change to the Kāinga Whenua Loan scheme:

• 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.

Further information on the changes can be found on the Ministry of Housing and Urban Development(external link) website, alongside supporting fact sheets

Read the Government’s announcement on beehive.govt.nz(external link).

Find the full range of home ownership products and resources.