First Home Buyers and The 2022 Budget

May 23, 2022

The Government just released its budget for the year. We dive into the details to see what new help there is for first home buyers (if any)

1. Price caps for First Home Grants have increased

Around the country, the Government has “lifted” the house price caps for first home grants. (The first home grant gives kiwisaver members up to $10,000 towards their deposit) You can see the previous and current caps here for purchasing existing and new build properties. In some areas of the country, the cap has gone up as high as $925,000. While helpful, in reality, the rise in cap barely covers the massive rise in house prices over the last 18 months.

2. Income requirements for First Home Grants stay the same but have an extra category

The old income caps are still in place, but there’s an additional category if you’ve got dependants.

The three eligibility categories are as follows:

  • You earn $95,000 or less and you’re the sole buyer (This is unchanged).
  • You earn $150,000 or less and you’re the sole buyer and have one or more dependants (This is new).
  • You earn $150,000 or less before tax and there’s two or more people buying the house (This is unchanged).

You can check your eligibility here

3. Changes to the First Home Loan criteria

House price caps have been removed altogether, however the income caps and Bank/lender requirements still apply.

The new income cap category introduced for First Home Grants for ‘individual buyers with dependents’ has it’s own cap, which is $150,000.

4. Kāinga Whenua loans increase

If you’re building, purchasing or relocating a house on whenua Maori, you can now get a loan up to $500,000 (previously $200,000). More information here.

What does this mean for first home buyers?

To be honest, raising the house price caps without raising the income caps probably defies logic and common sense.. Why not (at least) allow for wage inflation in the income caps too?

In an economic environment where inflation and interest rates are climbing fast, there aren’t many households that earn less than $150,000 a year that can afford to buy a $900,000 property – especially if that household has kids to feed and cloths..

If the government can’t get the rising cost of living under control, these new measures to help first home buyers won’t actually help many people.

However, in saying this, the removal of the house price caps on the first home loan scheme criteria opens up a lot of new options for properties around the country for first home buyers who are struggling to pull together a 20% or even 10% deposit.

Working with a financial adviser should be more than just getting a mortgage or getting into your first home. From helping you understand the property market, to demystifying all the financial lingo, the team at Float are with you every step of the way. If you’d like to chat, reach us on 0800 356 288 or at

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