Government Housing Package Injects $ 3.8 Billion Into Supply, Doubles Light Line Test, Expands Eligibility For First-Time Homebuyers | 1 NEWS


The government is injecting nearly $ 4 billion into the housing supply to boost development as part of a plan to tackle the housing crisis in the country announced today.

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Many New Zealanders find it difficult to enter the housing market. Source: 1 NEWS

This makes more first-time buyers eligible for grants and loans and doubles the light line test in today’s housing package.

The government has come under pressure to deal with the housing crisis, which has resulted in soaring prices, coupled with huge demand and a growing waiting list for public housing.

Prime Minister Jacinda Ardern described it as “a package of both urgent and long-term measures that will increase the supply of housing, relieve market pressure and make it easier for first-time buyers.”

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1 NEWS ‘Simon Dallow reviews some of the big moves in the package.

“The housing crisis is a problem that has been brewing for decades and will take time to recover, but these measures will make a difference.”

National leader Judith Collins described the package as “another cheap blow to homeowners.”

“By removing interest deductions and doubling the light line test, fewer houses will be built, fewer houses will be available for rental, rents will rise, and more children will grow up in motels.”

$ 3.8 billion housing acceleration fund to encourage supply

The multibillion-dollar fund is intended for a combination of private and government housing development, with additional funds intended to increase the use of vacant or underutilized state-owned land for housing.

It will be used to fund infrastructure projects across New Zealand, while accelerating the delivery of large-scale public, affordable and mixed housing projects.

Government invests $ 3.8 billion to accelerate the pace and scale of home construction

The government wants the local councils to open up the land and allow the densification of housing.

Housing Minister Megan Woods expected her to “help give the green light to tens of thousands of home construction in the short and medium term.”

“This fund will revive housing developments by financing necessary services, such as roads and pipes to homes, which are currently delaying development,” said Woods.

The government changes regional real estate ceilings for the first home loan grant and allows people to earn more to qualify for grants and access five percent loans.

First-time home buyers can access grants of $ 5,000 for an existing home or $ 10,000 for new construction – however, the property must be below a certain price, which is different in each region.

Auckland, which has a median house price of $ 1.1 million according to REINZ, sees its ceiling drop from $ 625,000 to $ 700,000. Wellington, whose median house price is $ 890,000, has fallen from $ 550,000 to $ 650,000.

Government Expands First-Time Home Buyer Assistance Criteria – Are You Eligible?

Christchurch has increased its cap from $ 500,000 to $ 550,000.

The eligibility of five percent home loans for first-time buyers has been expanded.

The home price cap for loans has been increased from $ 650,000 to $ 700,000, a person can earn up to $ 95,000 or have up to $ 150,000 with more than one buyer.

The income limits were originally $ 85,000 for one person and $ 130,000 for more than one.

The light line test is doubled from five years to 10.

Clear property rules tax money earned on an additional home as income, if it is sold within a certain amount of time. It does not apply to the family home.

The Bright-line test for double houses from five to 10 years old

The current test of only five years will remain the same for new investment properties.

Finance Minister Grant Robertson said the extension “would dampen speculative demand and tip the scales in favor of first-time homebuyers.”

Closure of the interest deductibility loophole

The possibility for real estate investors to offset interest charges with rental income is removed.

The government is also considering closing interest-only loans to speculators.


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