Home buyers falling foul of grant criteria

$123,000 paid back by 24 first-timers since HomeStart scheme began, figures show

First-home buyer grants are being revoked after recipients fail to meet eligibility criteria. In figures released to the Herald under the Official Information Act, 24 first-home buyers have had to pay back $123,000 in HomeStart grants after they failed the eligibility criteria since the scheme started in 2015.

The most common reason was failing to live in the house for the first six months, which affected 20 people. A relationship break-up affected two repayments and an incorrect assessment and a cancelled build were the remaining two reasons.

The grant provides eligible firsthome buyers with a grant of up to $5000 for individuals or $10,000 for couples to put towards the purchase of an existing home. The grant is doubled if it is for a new home.

Housing New Zealand senior product analyst Iain Duncan said the proportion of people who are intentionally dishonest was very small. During the application process they gather a large amount of data and it was usually quite easy to spot a fraudulent application.

“It’s an awful hassle to go through to rort the system.”

Duncan explained that they paid out the grant slightly before settlement, so a change in life circumstances just before or after settlement could result in repayment.

The KiwiSaver First Home Deposit Subsidy was launched in 2010 to help Kiwis into their first home. After another incarnation it was changed to the HomeStart grant in April 2015 to include an extra incentive to buy new builds, Duncan said.

Since April 2015, 80,000 applications have been approved and 39,000 have been paid out, amounting to $186 million.