Changes announced for home ownership products

First Home Grant house price caps will be updated in several areas throughout the country to align with current market values. The minimum First Home Grant house price cap for new builds will also be lifted from $500,000 to $650,000, to reflect the rising cost of construction.

Overall, First Home Grant house price caps for new build homes will increase in 37 areas.

House price caps set the maximum price for new or existing homes that can be purchased with a First Home Grant in each region.

Other updates include:

• The First Home Loan insurance premium for borrowers will halve, from 1% of the value of the loan to 0.5%, reducing the cost to successful applicants.
• Minor adjustments have been made to the KiwiBuild price caps for three-bedroom homes in some areas, to align with current market values.

The changes to the First Home Grant and KiwiBuild are expected to take effect from 15 May, 2023. The change to the First Home Loan is expected to take effect from 1 June, 2023.

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

In summary

Changes to the First Home Grant

• First Home Grant house price caps will be adjusted in several areas to align with the current market.
• The minimum new build house price cap for the First Home Grant will be lifted from $500,000 to $650,000, to reflect the rising cost of construction.
• View the updated First Home Grant house price caps.

Changes to the First Home Loan

• First Home Loan borrowers are charged an insurance premium to cover the cost of underwriting their low-deposit loan. This insurance premium will halve from 1% to 0.5%, reducing costs that are passed on to borrowers.
• For example, someone with a mortgage of $600,000 will now pay $3,000 towards the insurance premium, instead of $6,000.

Changes to KiwiBuild

• The three-bedroom price cap for KiwiBuild homes in the Queenstown Lakes District will increase from $845,000 to $860,000, to reflect the current market.
• Elsewhere, the three-bedroom KiwiBuild price cap for Hamilton, Christchurch, and places outside of the main urban areas has increased slightly by $5,000.
• View the updated KiwiBuild price caps.

Kāinga Ora administers a range of home ownership products on behalf of the Government. Further information and resources - including an interactive decision tool, eligibility criteria and how to apply - can be found under Home Ownership.