Using KiwiSaver Home Start Grant To Purchase Land

We were recently asked about the requirements for using your KiwiSaver HomeStart grant to purchase land for building a new home.  More specifically the question asked was “Is a HomeStart grant still obtainable in the situation of purchasing land now but waiting a period of time before building on it?”

To help us answer this question we got in touch with Iain Duncan from Housing New Zealand, who are tasked with processing applications for the HomeStart grant.

Here is what he had to say:

“When someone is buying land on which they are to build a home, the client must provide the following at the point of application:

·         Signed sale and purchase agreement for the section/land
·         Fixed price build contract that shows estimated commencement and completion dates for the build

There must be an intention, and evidence provided, to build as soon as possible and sitting on the land for a year whilst making a decision on what to build will mean the client will not be eligible for the HomeStart grant – although they may still qualify for the KiwiSaver savings withdrawal option (they will need to contact their scheme provider to discuss this further).

If we receive the application, general supporting documents and the agreement for sale and purchase for the land, but no fixed price build contract, we would be unable to approve the application, as we would be unable to calculate what the total land and build cost will be and if it is likely to meet the house price cap and would not be able to see that there was any immediate intent to build on the land. Also, when buying land, you need to apply for the grant to assist with the purchase of the land, as the grant must be used for the purchase of an estate in land. Once you own an estate in land, you are no longer eligible for the grant (or the savings withdrawal). You therefore cannot own land then apply for the grant to assist with the build of the property at some point in the future – it must be used to either buy land (which you have clear plans to build on) or an existing/new property.”

For more information about KiwiSaver savings withdrawal and access to HomeStart grants take a look at our website here for details.

Also be sure to take a look at our Top Tips To Avoid Delays With KiwiSaver HomeStart Grants

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