Buying Your First Home

Why home ownership is getting harder

Owning a home has always been part of the Kiwi dream. A place to call your own, put down roots, raise a family and build a future. But for too many New Zealanders, that dream is getting harder to achieve.

People are working hard and doing their best to save. But with groceries, power and other everyday bills taking up more of the household budget, finding enough for a house deposit can feel impossible.

Home ownership in New Zealand has fallen. And too many young New Zealanders are wondering whether they'll ever be able to buy a home here.

The problem isn't always being able to afford the mortgage. It's being able to save the deposit while paying rent.

Labour believes that if you're working hard and saving for your future, you deserve a fair chance to own a home. That's why we'll make it easier for more Kiwis to get into their first home, with smaller deposits and a new pathway from renting to owning.

1. Make it easier to buy with a 5% deposit

Saving a 20% house deposit can take years, even for people earning good incomes.

The First Home Loan already helps eligible buyers purchase a home with a deposit of just 5%. But the current income limits mean too many people miss out.

Labour will expand the First Home Loan scheme so more Kiwis can buy their first home sooner. We will:

• Lift the income eligibility cap to $300,000, making more first-home buyers eligible for the scheme
• Keep the deposit requirement at just 5%, reducing one of the biggest barriers to buying a home
• Bring more banks into the scheme, making it easier for people to get a First Home Loan through their own bank
• Make First Home Loans available for rent-to-buy purchases, so people can use the two schemes together

That's a big difference for someone who has been working and saving to buy their first home.

2. Introduce rent-to-buy to help more people become homeowners

For many families, paying rent and saving for a deposit at the same time is incredibly difficult.

Labour will introduce a new rent-to-buy pathway for eligible Kāinga Ora and community housing tenants who are working and ready to move towards home ownership. It will mean that paying rent can also help you build a deposit for a home of your own.

Under our plan:

• $100 a week will be credited towards your house deposit while you're in the scheme. That's $5,200 a year towards owning your own home
• Your deposit savings will be protected, with the money held safely in a trust account
• You'll have the opportunity to buy the home you're renting, at a price set by an independent valuation when you purchase
• You'll be able to use a First Home Loan to help purchase the home with a 5% deposit
• Your deposit credits will be protected if you can't complete the purchase, so you don't lose the money you've built up

We won't reduce the number of public homes to do it. For every public home sold through rent-to-buy, Kāinga Ora will build three more, with the proceeds from sales reinvested in new public housing.

Community housing providers won't be required to take part in the scheme, but we will work with those who do want to offer it to their tenants.

Part of our bigger plan for housing

Helping people save a deposit is only part of the answer. We also need to build more homes and get our construction sector moving again.

Labour will restart Kāinga Ora's building programme, deliver at least 1,500 additional community housing places a year, and get local builders and tradies back to work. See also Start Work Now.

We'll also provide a Crown guarantee for community housing so housing providers can borrow money to build at lower interest rates. It comes at no cost to taxpayers but means more homes can be built.

See all of Labour's policies →