Almost every Kiwi dreams of owning a home, and being able to build a brand new home where you can make decisions (within a budget) on the design appeals to most of us. It means that you can get a home that fits your lifestyle, and being new it means you can enjoy the new home without the maintenance issues that come with older homes.
Brand new homes might be more expensive, but the operating costs such as heating etc are generally lower.
When we talk about new builds for lending purposes, we are looking at what the banks can treat as exempt from the LVR rules, especially for first home buyers who may not have the benefit of a large deposit or equity in another property.
This means brand-new houses or houses yet to be built. This can include:
A brand new house that is being sold by the developer. The house might have already been built and has title and code of compliance (CCC), but the CCC must not have been issued more than 6-months ago.
A turn-key which is a house that is not yet built (at least not completed) and is being sold as a completed home with a fixed price. In most cases you would need to pay the deposit and then you would have a lump-sum due when you take possession.
Standard new build constructions, where you buy the section (land) and have a house built. This can include the typical house and land packages that many of the group builders offer, and also the more bespoke homes that you can have built on a section. With these you get finance to buy the land and then have finance to do the build, with the build finance drawn down as the build progresses.
FAQ's
What is a new build?
When we talk about new builds for lending purposes we are looking at what the banks can treat as exempt of the LVR rules and this is defines as when the borrower is constructing a new home or is purchasing a newly built home from the developer within 6 months of completion.
Can I use KiwiSaver for a deposit on a new build?
Yes, you can use KiwiSaver for the deposit providing you intend to live in the new house. On a brand new house that is completed it is easy, and on a turnkey you can use yor KiwiSaver for the deposit too, although if the build is going to take a while then you might want to hold off and withdraw your KiwiSaver on completion once you have contributed for a few more months. When you buy a section to build on your KiwiSaver (the deposit) gets applied to the purchase of the section, and then the lending is for the balance of the section and the build.