Home buyers cash in
By ROB STOCK - Sunday Star Times | Sunday, 20 May 2007
Under the eligibility rules, outlined in Treasury post-Budget notes, people who get the housing grants will be forced to buy a house with a value in the lowest 25% of homes in their town, area or city.
In Auckland City or the North Shore, the Treasury notes say, that would be a home costing $400,000 or less, while in the Queenstown Lakes district, it would be a home worth $300,000 or less. The measure is designed to stop people in cheaper areas using KiwiSaver to buy bigger homes than the government thinks is reasonable.
Under the KiwiSaver scheme, to be introduced on July 1, there will be a first home ownership grant of $1000 a year for each year of saving. That is capped at $5000 per person, so a couple could get $10,000.
The first home deposit subsidies will be paid out in 2010 because only KiwiSavers who have been saving at least 4 per cent of their gross salary into KiwiSaver for three years will be eligible.
For households and families with three or more KiwiSavers clubbing together to buy, the income cap will be $140,000. The levels would be reviewed in 2009, and the property price caps would be reviewed annually.
Property investor Andrew King said the stipulation that homes be at the bottom end of the market appeared to be forcing relatively well-earning couples to downsize their aspirations with the intention of leaving them enough left over to save into KiwiSaver.
"I guess they are trying to reduce the quality of the houses we live in," said King.
"They feel the homes we live in are too grand and that we spend too much money buying them."
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