KiwiSaver Q&A: Amanda Morrall and Craig Simpson discuss house price caps on first time home subsidies and precious metals funds
Q) Could you tell me if the "maximum house price cap" for getting the Kiwisaver first home subsidy is the QV of the house, or the purchase price?
A) The house price cap for the first time home subsidy isn't tied to the QV or the purchase price. It correlates more closely with the first quartile home prices. Currently, Housing New Zealand Corporation has the cap set at $400,000 for Auckland, Wellington, Selwyn District and Queenstown Lakes District. For all other areas, it's $300,000. Keep in mind that the subsidy is $1,000 for every year invested in KiwiSaver up to a maximum of $5,000 per person. There is also a related income threshold. For two people, it's $100,000 (before tax) and three or more $140,000. The subsidy not only applies to houses but also to land and to apartment buildings. Under the rules, the applicant(s) have to be living in the home. If not, HNZC could order you to repay the deposit.
If you are buying land that you plan to build on, the price cap applies to the total cost of land and the home built. I can't imagine you could find a section and build a home on it for $400,000 in Auckland but if you can I'd love to know about it. As a further challenge, the rules also specify that you must build on the land within 12 months of purchase. Applicants will also have to prove up front that they have sufficient money to fund the project before construction gets underway.
For further information, I suggest you check out the Housing New Zealand Corporation website here which details in the rules and conditions at length.
Q) I'm looking for a KiwiSaver scheme that is fully invested in precious metals. Do you know of any funds out there?
At present there are no KiwiSaver funds on the market that invest exclusively in precious metals. Why? Mainly because there would be too much risk associated with them despite gold being regarded as a safe haven in these unstable times. Although there are other single sector funds in KiwiSaver, they are arguably more diversified because they have multiple holdings. They include a New Zealand equities fund, an international equities fund, property funds and cash.
If you are keen on holding gold in your portfolio, you can always do it outside of KiwiSaver. To explore the options, risks and upside, you may like to watch this video with John Barry of Pathfinder Asset Management. Our new gold and silver section also contains news, analysis and charts which you might find valuable.