Everything You Need to Know About KiwiBuild
If you don’t yet own a home but plan on buying your first home soon, news about KiwiBuild would have been on your radar for quite some time. The New Zealand Government first started implementation of KiwiBuild in December 2017 – with homes becoming available around the country from October 2018.
Interested home buyers need to register on the KiwiBuild website and pre-qualify as a KiwiBuild home buyer. Before you register, it’s essential that you understand everything there is to know about KiwiBuild, such as the eligibility criteria, process, purchase price, and more, so you can start your journey on the property ladder with stable footing.
Without further ado, here’s everything you need to know about KiwiBuild:
What is KiwiBuild?
KiwiBuild is a plan to build 100,000 affordable and quality houses in 10 years that are sold at a set price through a randomised ballot system to first home buyers that meet eligibility criteria (or in limited circumstances to those who have owned property before).
Who is involved in KiwiBuild?
- Ministry of Housing and Urban Development
- Independent developers
- People who want to buy KiwiBuild houses who meet the eligibility criteria.
KiwiBuild Eligibility Criteria
People who register for KiwiBuild must meet strict eligibility criteria. They must:
- Intend to live in the property for at least three years. They will have to sign a Deed of Covenant. KiwiBuild homeowners can have flatmates/boarders and can apply for permission to sell early if there is a significant change in circumstances. However, breaches can mean payment to the government.
- Be a first-home buyer (and not have a family home through being in a legal relationship with a home owner), or no longer own property and be in a similar financial position as a first-home buyer. For second chancers: realisable asset caps apply of between NZ$80,000 – $120,000 (excluding KiwiSaver savings). Discretionary beneficiaries of trusts with property are not disqualified.
- Be a NZ citizen or permanent resident, or resident visa holder who is ‘ordinarily resident in New Zealand’ (or be applying with their legal partner who is, i.e. buying a family home).
- Meet income caps – no more than $120,000 for a single purchaser, or $180,000 for more than one purchaser.
- Be 18 or older.
Where will KiwiBuild houses be built?
KiwiBuild houses will be built all over the country, but with particular focus on areas with high housing demand – at least 50,000 are planned for Auckland. Sign up for updates to find out more, they are popping up regularly.
How much are KiwiBuild houses?
Here’s the price range:
- Auckland and Queenstown maximum caps are $500,000 for one bedroom, $600,000 for two bedroom and $650,000 for three bedroom.
- Everywhere else, the maximum is $500,000.
How do I buy a KiwiBuild home?
Step 1 – check if you are eligible to buy (see above)
Step 2 – make an online profile – you can enable email alerts for houses that meet your criteria – and before you enter a ballot you must pre-qualify (which will be valid for six months)
- To pre-qualify you will need proof of income, proof of citizenship/residency and finance pre-approval (the same as a regular purchase) all attached to a standard form statutory declaration).
- The pre-qualification application must be completed by everyone who is purchasing the house.
Step 3 – if you are interested in a house that becomes available, submit your ballot (you must be eligible and pre-qualified to enter a ballot).
Step 4 – successful applicants are randomly picked and put in touch with the developer to complete the purchase in the usual way.
When will the houses become available?
Houses are becoming available all the time, the first buyers have already moved in.
When to get your property lawyer involved
You may think it’s too early to get your property purchase lawyer involved, but you should contact your lawyer at least by the time you are entering a ballot. If you win, you will need to have a lawyer ready to review the agreement and help you access your KiwiSaver and HomeStart Grant funds (it’s best to get preapprovals for these before you enter the ballot).
Do you have more questions about KiwiBuild?
Here at HomeLegal, we know the property conveyancing process in New Zealand inside out. If you have any more questions about KiwiBuild, or would like to get in touch with our property lawyers to kickstart your home-buying process, contact our team today at 0508 HOMELEGAL.