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We have a guest author for this week's blog. Experienced lender Stephanie Murray from Stephanie Murray Mortgages tells us what we should know about KiwiSaver.
Although KiwiSaver is a fantastic scheme, the benefits of what it offers are not fully understood.
Many more individuals can benefit from KiwiSaver than they know – it is a very common occurrence for clients to sit down with us and realise they may be a lot closer to home ownership than they thought possible and the loan repayments are very similar to what they are currently paying in rent!
There are two parts of KiwiSaver. This first being a KiwiSaver withdrawal and the second being the KiwiSaver subsidy.
We will start with the KiwiSaver withdrawal.
This is a withdrawal of the funds that have been saved in to KiwiSaver. You must have been contributing for three years minimum to withdraw. If you have had a break from contributing, the amount of time must add up to a minimum of three years.
If you are a first home buyer you qualify to withdraw the entire balance minus $1000 that needs to be left. This may also work if you are a “second chance” buyer which basically means you need to prove you have the same number of assets as a first home buyer.
The second part is the KiwiSaver subsidy.
The rules have changed recently on this. The subsidy is a grant – ie “gift” and is a separate amount from the funds you have saved in KiwiSaver. There are criteria to qualify for this. The first is personal income which needs to be no more than $130k combined per annum for a couple or $85k for an individual. The second is a purchase price cap – this changes depending on which part of the country you are purchasing in. For example this is currently set at $400k if you are purchasing in Taranaki, but is $450k if you are constructing a new home.
The amount for the grant varies as to how many years you have been in KiwiSaver. The minimum is of course three years and is $1000 per year to a maximum of $5000. This is doubled to $10,000 if you are building a property.
A subsidy can only be used if you are purchasing the home to live in – the same with KiwiSaver withdrawal. Not investment properties.
With the knowledge it is easy to see how it is possible to come up with the 10% deposit required by banks to purchase your first home. If you have been in KiwiSaver for five years you could receive up to $10,000 per individual to purchase your first home – along with of course the savings you have been putting away in to KiwiSaver.
The team at Stephanie Murray Mortgages find the right solution for your individual needs. Stephanie Murray Mortgages go to all the major banks and lenders to find the best interest rates and package for you. Stephanie Murray Mortgages is based in New Plymouth and Wellington and will walk you through the process at no cost to yourself. Call Stephanie Murray Mortgages on 0800 33 00 22. For more information visit www.stephaniemurray.mortgage.
Disclaimer: The information on this page is general information only and must not be relied on as legal advice. A disclosure statement is available on request or at www.stephaniemurray.mortgage. Please note Legal Beagle is not a law firm or a substitute for a law firm. We are unable to provide any kind of advice, explanation, opinion, or recommendation about possible legal rights, remedies, defences, options, selection of legal documents or strategies.
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