National offers $20k kick-start for homeowners
TRACY WATKINS AND VERNON SMALL
National has announced an up to $20,000 kick-start for low and middle income couples who build a new home.
Speaking to a 2500 strong crowd at National's campaign launch in Auckland today, leader John Key said the new package would help about 90,000 first home buyers over the next five years.
The HomeStart grant replaces the KiwiSaver first home deposit subsidy scheme and doubles the support for buying a new home. It also increases the cap on the price of eligible houses.
Currently first home buyers are eligible for a grant of $3000 after three years in KiwiSaver, $4000 after four years and $5000 after five years.
Under the new Homestart scheme, that would double to $6000 after three years, $8000 after four years and $10,000 after five years for the purchase of a newly built home.
Housing Minister Nick Smith said the package means a couple in Auckland each earning $50,000 who have contributed to KiwiSaver for five years will be able to withdraw $35,000 and receive a $20,000 KiwiSaver HomeStart grant, giving them a $55,000 deposit on a new home.
The KiwiSaver First Home withdrawal is limited to members buying a first home who have been contributing for a minimum of three years.
The new KiwiSaver HomeStart Grant and Welcome Home Loans have additional criteria of people having an income below $80,000 for an individual and $120,000 for a couple.
The house being purchased must also be below the regional house price limits of $550,000 for Auckland and between $450,000 and $350,000 in other parts of the country.
National's campaign launch is the biggest in years and comes off a torrid week following the release of the book Dirty Politics alleging smear campaigns run out of the Beehive.
Labour leader David Cunliffe said National's housing plan would increase house prices but not address the shortage of supply.
"Housing markets need both demand and supply. There's nothing in this that will build a single house."
He said if two buyers who previously had $400,000 to spend now had $410,000 they would bid against each other it was a fair bet the price would rise.
Labour would not follow suit on National's plan to double the KiwiSaver subsidy and allow the tax credit to be withdrawn.
He believed Labour's plan, which is to fund the building of 10,000 affordable houses a year for 10 years and on-sell them, was a better and more direct way to address the supply shortage.
If National had wanted more houses built "why didn't they just build them?"
"The Government has confused the demand side of the problem with the supply side."
National's housing package explained:
- Kiwisaver First Home deposit subsidy becomes the KiwiSaver Homestart grant. The amount doubles - first home buyers purchasing a newly built home will get $6000 (up from $3000) if they have been in Kiwisaver for three years, $8000 after four years and $10,000 after five years.
- The eligibility for Welcome Home loans would be expanded, setting house price caps at $550,000 in Auckland, $450,000 in Wellington and Christchurch and $350,000 in the rest of the country.
- The income caps for both schemes would be $80,000 for an individual or $120,000 for a couple.
- Kiwsaver members could also withdraw all of their savings (except the $1000 kickstart) to go towards their first home.
- These proposals would cost $218m over five years and take effect on April 1. National estimates it would get an extra 40,000 into their first home.