If you’re looking to build your first home, you may be a step closer to that dream with the New Zealand Government announcing new price caps in several regions through its First Home Grant scheme.
The scheme offers eligible first-time home buyers a grant of up to $5,000 per person or $10,000 per couple towards the purchase of a property. However, these grants are subject to certain conditions – one of which is the price of the property.
Housing Minister Dr Megan Woods says changes are being made to first home grants and loans to help get more people into home ownership.
“Overall, First Home Grant price caps for new build homes have increased in 37 areas. This will support the supply of new homes and means first home buyers in those regions who are looking to buy a newly built home will benefit the most,” Dr Woods says.
The lowest First Home Grant house price cap for new builds is lifting from $500,000 to $650,000, with higher rises in some regions. This reflects the rising cost of construction and gives more eligible first home buyers a choice between buying an existing or a new build home.
The new caps will apply from 15 May.
For example, the new caps for a new build property in these areas are:
You can view a full list of the updated caps by clicking here: First-Home-Grant-price-cap-table-26-April-2023.pdf (kaingaora.govt.nz)
In addition to this, the First Home Loan insurance premium is being adjusted.
Borrowers who use the First Home Loan are charged an insurance premium to cover the cost of underwriting their low deposit loan.
With the changes this will decrease to 0.5% of their total loan. So, for example, someone with a mortgage of $600,000 will now pay $3,000 towards the insurance premium instead of $6,000 previously.
If you’re a first home buyer looking to get on the property ladder, this is a great step to get you into home ownership.