First home buying – things to consider
Buying your first home can be daunting.
KiwiSaver is a hot topic and knowing what you are entitled to is a good place to start.
As a first home buyer you may be eligible to withdraw funds from KiwiSaver as well as receive a Housing NZ KiwiSaver Home Start grant.
The Kiwisaver facts
All KiwiSaver providers have different eligibility criteria. However, all providers require you to have been in KiwiSaver for at least 3 years, and that you will live in the home you are purchasing.
If entitled, you may be able to withdraw all contributions except the $1,000 government kick start.
On top of KiwiSaver, you may be entitled to a Housing NZ Home Start grant of between $3,000 and $10,000. You must meet certain criteria including:
- earning $80,000 (or less) for a single purchaser, and $120,000 (or less) for 2 or more purchasers;
- having been a regular contributor to a KiwiSaver scheme (minimum of 3 years);
- holding a minimum 10% deposit; and
- live in the property for a minimum of 6 months from settlement.
Relationship property issues are often overlooked by first home buyers.
Usually, partners bring unequal property to a relationship. Some are happy to share 50/50, and some wish to protect their separate property.
After a period of time (usually 3 years) the home becomes relationship (50/50) property. This applies whether you bought it together, or if one partner moves into a home owned by the other.
Partners must consider a “contracting out” agreement if they do not want the law to deem 50/50 sharing.
Succession – wills and trusts
As uncomfortable as it may be to talk about, death is inevitable.
Having your Will in order ensures that your wishes are given effect to and your family is saved the hassle of tidying up your affairs in case of an untimely death. You can also specify guardians for your children.
Depending on your circumstances, you may wish to consider a family trust to protect your assets for your family.
Enduring powers of attorney
Enduring powers of attorney (EPA’s) allow you to appoint someone to look after your affairs should you lose the ability to make decisions for yourself.
You can appoint someone as an attorney for your property, and also in relation to your personal care and welfare.
An EPA will allow a trusted person to act in your best interests if you cannot make decisions for yourself.
How lawyers help you
Getting advice from a lawyer before you sign an agreement for sale and purchase can reduce your stress.
Lawyers advise what is best for you in your circumstances.
Usually, an initial consultation is no charge. It is better to be informed about such an important step in your life.