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KiwiSaver Q2 2016: First Home Buyers & Tax Credits

Wealth Works Authorised Financial Adviser Bonard Metahysa shares the latest KiwiSaver updates including good news for "second chance" home buyers plus shares how to ensure you're entitled for the $521 Government tax credit. 

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The most recent KiwiSaver change affects previous homeowners who would like to access their KiwiSaver funds towards purchasing a new property. We saw the Building and Housing Minister Dr Nick Smith tweaking the rules around the KiwiSaver withdrawals in favour of the ‘second chance’ home buyers.

 

Q2 is also the time that you want to make sure you’ve made the minimum contribution of $1040 to benefit from the Government contribution of $521. You have until June 30th to top up your KiwiSaver if you need to.

 

“Second Chance” Home Buyers | Income Cap removed

A number of previous homeowners, who may have experienced major setbacks in their professional or personal lives but have seen their circumstances improved, and would like to purchase a property are asking: Would I still be able to withdraw my KiwiSaver funds towards a home purchase?

 

People who have previously owned a home will be able to access their KiwiSaver funds to purchase again as ‘second chance’ home buyers subject to meeting the relevant criteria.

 

Under the previous rules, an individual who had assets below 20 percent of the house price cap for an area and who earned below $80,000 a year or $120,000 for a couple could access their KiwiSaver funds, as well as a grant of up to $10,000.  Now this income cap has been removed although realisable assets still must be under 20%. This is fantastic news and as Minister of Building and Housing, Dr Nick Smith believes:

 

"This change will help many thousands of mid-life, middle-income New Zealanders who have been through a separation or business failure and are struggling to get back into homeownership by enabling them to access their KiwiSaver funds.”

Dr Nick Smith, Minister of Building and Housing

 

Of course there is still criteria to follow so simply get in touch if you’d like more information.

 

Tax Credit $521 | 30th June deadline

Did you know that if you are self-employed, not working, or not contributing towards your KiwiSaver you could still get the annual Government contributions of $521?

 

All you have to do is contribute $20 per week throughout the financial year (1st July – 30th June) which is equivalent to $1042 per annum. As the Government would contribute .50c for every $1 that you contribute towards your KiwiSaver by contributing $20 per week throughout the financial year, or making a lump sum contribution of $1042 before the end of the financial year, you would be eligible for the maximum Government contribution of $521.

 

It is important to check with your provider to ensure you have made sufficient contributions throughout the year. If not, you can arrange a top up payment to ensure you receive the maximum payment of $521. Visit the Inland Revenue website for all the details around the Member Tax Credits.

 

Are you getting maximum returns from your KiwiSaver? If you or someone you know would like a complimentary review simply get in touch today on 09 306 5820.

 

Bonard Metahysa | bonard@wealthworks.co.nz

A disclosure statement is available, on request and free of charge.


 
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