Our TipsWe've assembled some useful information into flyers that you can download and read in your own time.
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Are you A KiwiSaver Member?
If so, and you've been a member of KiwiSaver for 3 or more years you may be able to withdraw some of your KiwiSaver savings to put towards buying your first home. If you are eligible, you will be able to withdraw the current value of your contributions and your employers’ contributions. From 1 April 2015 you can now withdraw any member tax credits (MTC) providing you have been in New Zealand for each year that you earned MTC. You cannot withdraw the $1,000.00 kick-start.
Home Start Grant
After 3 years of contributing to KiwiSaver, you may be entitled to a Home Start Grant (“the Grant”). The Grant is $1,000 for each year you've been contributing to KiwiSaver, up to a maximum of $5,000. If you're a couple buying a house together and you both qualify for the Grant, you could receive a combined grant of up to $10,000.
If you are buying a new house you may qualify for double the Grant.
Examples of what you might be entitled to:
If you are purchasing an existing/older home:
3 years of contributing = $3,000 (the minimum you can get)
4 years of contributing = $4,000
5 years of contributing = $5,000 (the maximum you can get).
If you are purchasing a new home, a property bought off the plans or land to build a new home on, the HomeStart grant is $2,000 for each year of contribution to the scheme:
3 years of contributing = $6,000 (the minimum you can get)
4 years of contributing = $8,000
5 years of contributing = $10,000 (the maximum you can get).
To be eligible for the Grant, you must:
• Be 18 years or over.
• Not own a home or land.
• Have not received the HomeStart grant or previous KiwiSaver deposit subsidy before.
• Be a member of a KiwiSaver scheme, complying fund or exempt employer scheme (contact your scheme provider to check your scheme is eligible).
• Have contributed at least the minimum allowable percentage of your total income to a KiwiSaver scheme, complying fund or exempt employer scheme for at least three years. (From 1 April 2013 the minimum contribution was increased to 3 percent of your income, 3 percent of the minimum wage for non-earners or 3 percent of your yearly benefit for beneficiaries. From 1 July 2007 to 31 March 2009 the minimum contribution was 4 percent, and from 1 April 2009 to 31 March 2013 it was reduced to 2 percent.)
• If you are the sole buyer and have earned $85,000 or less (before tax) in the last 12 months.
• If you are two or more buyers who have earned a combined income of $130,000 or less (before tax) in the last 12 months.
• Have a deposit that is 10 percent or more of the purchase price. (The 10 percent deposit includes the money you can withdraw through the KiwiSaver first-home withdrawal feature, the HomeStart grant amount you or the other purchasers may be eligible for and any other funds, such as savings, fixed and term deposits or funds already paid to a real estate agent or solicitor. The deposit can also be gifted by a relative with a gifting declaration.) Note that the deposit cannot be borrowed or secured against other property, equity gifts, credits on settlement or family guarantees in order to qualify.
• Be buying one of the following types of property and land arrangements:
o fee simple
o stratum estate (freehold and leasehold)
o cross-lease (freehold and leasehold)
o multiple-owned Maori land.
• Be purchasing an equal share in a property proportionate to the number of intended property owners.
• Be purchasing a home under the local price cap (Southland price cap is $400,000.00 for existing/older properties and $450,000.00 for new properties).
*If you've owned a home before, in some circumstances you may still be eligible for the first home deposit subsidy. Housing New Zealand will need to determine that you are in the same financial position as a first home buyer.
Housing New Zealand require a minimum of 4 weeks from the date your application is approved until the settlement date. You must ensure that the settlement date for your purchase gives you plenty on time to have the application processed and approved.
What you need to do…
The Application form is available online: https://hera.power-business.co.nz/hnz/HomeStart.nsf
If you wish to withdraw your KiwiSaver funds or apply for the Grant, we strongly recommend that you contact us, or your mortgage broker/banker as soon as possible. We can assist you with completing the forms and ensure that the forms are sent away within the required timeframes.
Once you have been approved by Housing New Zealand and all documentation has been signed, the Grant Funds are sent and held in our trust account until settlement day.
Your Scheme Provider will forward us your KiwiSaver funds directly to our trust account, which will be held until settlement day.
Please note that if you sign an agreement for sale and purchase where a deposit is payable to the real estate agent or vendor directly, you cannot use your KiwiSaver funds or the subsidy to pay this.
If you have any questions at all we will be more than happy to help
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First you need to sign an agreement for sale and purchase which must be in writing. Generally a Real Estate Agent will help you to negotiate the purchase and you are entitled to make such conditions as you see fit. Some conditions would include;
1. Arranging finance and house insurance suitable to yourself
2. A satisfactory Builders Report and/or a Valuation Report and/or other specialist reports (which might include P testing)
3. A Land Information Memorandum (LIM Report) What the Council knows about the property including all permits and compliance certificates.
Once the agreement has been signed the Agent will send us a copy. We will contact you to discuss the Agreement and ask you to sign a letter of engagement. Our letter of engagement will include an indication of fees and disbursements that are likely for your particular transaction.
If the agreement is subject to various conditions, and most agreements are, you must personally let our office know when you have satisfied those conditions by contacting us. Likewise you should contact us if you have any queries. There are no extra charges for contacting us to discuss any concerns that you may have at any time.
Once we have confirmed the agreement as unconditional which must be in writing and communicated by us to the solicitor on the other side, we will then receive documents from your bank, and KiwiSaver provider (if appropriate) which we then prepare for you to sign. We will then get you in to sign the documents and go through all of the legal matters and also talk to you about practical things such as keys and most importantly the funds you will need over and above the mortgage. In particular there will be an adjustment made for rates which will be payable on the settlement day. We will explain all about this when we see you.
It is important that you make yourself available to sign paperwork before settlement day. If you will not be available for the days leading up to settlement please notify us well in advance.
• You will need to bring with you to your appointment with us:
• Current Photo I.D such as Driver Licences, Firearms Licences or Passports in the correct names (if you have got married recently please also bring along your marriage certificate).
• Verification of your current Address by way of a bank statement, letter from IRD or utility bill.
• Bank A/C Details for any balance left over from the transaction.
• If we have not already got a copy, your insurance details for your new house.
• Your IRD Number (If the property is to be purchased in the name of a Trust then we will also require the Trust’s IRD Number).
DON’T FORGET TO
• Notify your change of address and/or contact the post office for re-direction of mail.
• Cancel Telephone, internet, newspaper delivery and arrange it for your new home.
• Contact your electricity company to ensure a continuation of supply to your new address
• Organise shifting times.
• Confirm dates & locations with removal company.
• Arrange/Transfer House insurance to your new property with your Bank noted on the policy as first mortgagee. You will need to have details of the new insurance forwarded to us.
ON MOVING DAY
• Arrange care of your children on moving day
• Make arrangements for pets
• Keep in contact with our office.
After it’s all over we will send to you our letter confirming the purchase of your new property and a final statement showing you where all your money went and a Copy of the Certificate of Title.
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Deciding to buy into a Retirement Village is an important decision and can have many financial and legal implications. It is different to buying a house. Villages vary considerably in their accommodation, legal and financial structures, and management. The Retirement Villages Act 2003 provides intending residents and current residents with certain rights.
What am I typically liable to pay for?
1. A Capital Sum – this is similar to a purchase price. In most cases, in return for payment of the capital sum you will get a licence to occupy the unit. This gives you the right to live in the unit but you do not own the unit.
2. A Village Fee – this is a weekly fee and covers costs such as rates, insurance, maintenance, security and gardening.
3. Utilities - such as electricity, telephone, sky and contents insurance.
4. Your own personal expenses – such as medical costs, normal household and personal expenses; and
5. Extra costs – some villages include a greater range of services in their fees while others let you choose and pay for the services you want or need. Some villages add a premium for these services.
Will I get any money back when I leave the unit?
Usually, the Village Operator controls the sale of the unit when you vacate. You will often have to wait until the unit is sold before getting your money back and will often be responsible for continuing to pay the weekly village fee until the unit sells.
There are significant costs associated with leaving a village and selling the unit. In most cases, you will end up with significantly less money than when you entered the village.
The following costs may be deducted from the Capital Sum:
1. A Deferred Management Fee – this is a percentage of the Capital Sum over a number of years. Each Retirement Village has a different calculation. Some are 10% each year for three years and some are 4% of the Capital Sum per annum for a maximum period of 5 years. This covers costs such as communal facilities, management or long term maintenance;
2. Any costs associated with restoring the unit back to the condition it was in when you moved in, less fair wear and tear; and
3. Marketing, legal and administration costs associated with selling the unit.
In many instances, you do not share in any capital gain on the resale of the unit, and in some cases, you may also be required to pay for any capital loss made on resale of the unit.
What is the difference between buying into a retirement village and owning my own home?
1. Usually given the ownership structure of the village, you will not own the unit. Most villages give you a licence to occupy the unit, this licence applies personally to you until you are no longer able to live in the unit.
2. The village retains any capital gain on the unit when it is sold.
• You will be responsible for interior maintenance of the unit while the village will be responsible for exterior maintenance;
• You cannot make additions and alterations to the unit without the prior written consent of the village operator; and
• You are not responsible for insuring the unit, but you are responsible for your own contents insurance.
The Key Documents
You must be provided with the following documents by the village operator:
1. The Disclosure Statement
This document provides information about the ownership, management and supervision of the village. It includes information about the state of the village, the services and facilities offered and the arrangements for maintenance and refurbishment of the unit. The costs of entering the village, living in the village, and what you can expect to get back after you leave the unit must also be explained.
2. The Occupation Right Agreement
This is a legally binding agreement between you and the village operator. It sets out the terms and conditions of your right to live in the village and repeats much if what is contained within the Disclosure Statement.
3. The Code of Practice
This sets out the minimum requirements to be included in every resident’s Occupation Right Agreement.
We are experienced in advising clients buying into retirement villages and can assist you with this important decision.
Click on the following link to download our terms of engagement and information for clients
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If you would like us to prepare a Will for you, please print the attached form and return to us once you have completed it.
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