Site Designed By Airnet
Is own-home aim a goer at age 66?


Q.          My wife and I have been in KiwiSaver for 5 years with about $5k between us. We also have $2k in savings. I am 66 and my wife is 55. Four years ago we lost everything in the crash, including 2 houses. We are now in a Housing NZ house, but would dearly love to own our own house again.  We are looking to buy a cheap flat currently on the market at $139k. Earlier this year Kiwibank turned us down on same flat. Since then I have picked up extra work and currently earn $492 gross plus our super at over $500 pw. Is there any way that we could tap into the home loan scheme to purchase - or do I withdraw what I have contributed to KiwiSaver and put it down to a bad experience and not try?
 
A.           I am sorry to hear about your previous property-owning experience. As you are over 65, as long as you have been a member for at least 5 years you can withdraw all the money in your KiwiSaver account at any time. Your wife at 55 will need to apply to Housing New Zealand for pre-approval to withdraw her KiwiSaver contributions for any purchase, as she is a previous property owner. The form is available on their website. 
 
Would you qualify for the Deposit Subsidy? This is worth $3000 to $5000 per eligible applicant. It does not have to be repaid as long as you live in the house for at least 6 months. You appear to meet most of the criteria as you have both been in KiwiSaver for more than 3 years, do not currently own property, your realisable assets are below $60,000 (20% of the Hawkes Bay price cap) and your combined income is under the $120,000 limit for a couple. 
 
Unfortunately though, I do not believe that your level of KiwiSaver contributions would be sufficient to qualify. Housing New Zealand asks for evidence of KiwiSaver contributions over 3 to 5 years. These years do not have to be consecutive, but for a self-employed or unemployed person the required savings level is the equivalent of the minimum contribution for someone on the minimum hourly wage.   Up until 1 April 2009 this was 4%, reducing to 2% for the next 4 years, and 3% since 1 April 2013. 
I asked Housing New Zealand to comment on your situation. Matthew Smith, Senior Manager, Financial Operations said: “The level of their KiwiSaver savings suggests they may not have contributed the minimum percentage of their incomes for at least three years as required.” However, he went on to say: “Your reader may be eligible for a Welcome Home Loan as participating lenders will consider applications from previous home owners who are in a similar position to first home buyers in terms of realisable assets. However, their age may be a limiting factor, and banks may shorten the term of any loan as a consequence.  They should also find out about FirstHome which gives eligible buyers preferential access to selected vacant properties across the country that Housing New Zealand is selling.  These homes will be available for a period of three months before they are also placed on the open market. Eligible buyers will receive a grant of 10 percent of the purchase price of the property issued at settlement.  The maximum grant is capped at $20,000. Currently, there are 3 properties for sale under FirstHome in Hawke’s Bay. More information about FirstHome can be found on the Housing New Zealand website www.hnzc.co.nz/rent-buy-or-own/firsthome.”
 
This sounds like it could be a good option for you to investigate. As the properties listed are in the $135 - $180k range, a 10% grant is generous indeed. Housing New Zealand is working to help New Zealanders into their own homes, so do not give up on your home-owning dream.
 
 
Shelley Hanna is an Authorised Financial Adviser FSP12241. Her disclosure statement is available on request and free of charge by calling 870 3838. The information contained in this article is of a general nature and is not intended to provide personalised advice. Send your KiwiSaver questions to shelley.hanna@peak.net.nz