Budget 2025: What First-Home Buyers and KiwiSaver Members Need to Know.

Less Government Top-Up for KiwiSaver

From 1 July 2025, the government’s KiwiSaver contribution will drop from 50 cents to just 25 cents for every dollar you contribute, up to a new maximum of $260.72 per year (down from $521.43). If you earn over $180,000 a year, you’ll no longer be eligible for this government top-up.

What this means:

If you’re saving for your first home, you’ll need to rely more on your own savings and employer contributions, as there’s less “free” money from the government. Now is a good time to check your KiwiSaver settings and consider increasing your contributions to stay on track.

KiwiSaver Contributions Are Increasing—But Gradually

To help Kiwis grow their savings, the default employee and employer contribution rates are rising:

• From 1 April 2026: Minimum contributions go from 3% to 3.5%

• From 1 April 2028: They increase again to 4%

If you need to, you can apply for a temporary exemption to stay at the 3% rate for up to 12 months.

Good News for Younger Savers

• From 1 July 2025: 16- and 17-year-olds will be eligible for the government KiwiSaver contribution.

• From 1 April 2026: Employers must also contribute to KiwiSaver for 16- and 17-year-old employees.

This means teenagers starting work can now get a real head start on their savings—with both government and employer contributions.

No New First-Home Subsidies

Despite rumours, there are no new cash subsidies for first-home buyers in Budget 2025. The main support remains the ability to withdraw your KiwiSaver for a deposit. There’s no new scheme covering a percentage of a home purchase, and budget documents confirm this.

More Social and Affordable Homes on the Way

The government is investing in new housing, especially in Auckland and regional areas:

• $128 million over four years for 550+ new social homes in Auckland

• $82 million for community housing groups

• A new Flexible Housing Fund launching mid-2027, aiming for up to 900 more homes across the country

If you’re struggling to buy, keep an eye on these developments—they may offer more rental stability or a stepping stone while you save.

Accommodation Supplement: More Help Coming in 2027

From April 2027, the Accommodation Supplement thresholds will be updated, so more low-income homeowners and renters may qualify for financial help with housing costs. If you currently don’t qualify, check again in 2027—extra support could be available.

Market Outlook: Prices and Rates

House prices are forecast to rise:

• 0.3% by mid-2025

• Up to 5.6% by mid-2026

• Averaging 5.3% annual growth through 2029

• Interest rates are expected to ease, making borrowing more affordable.

• First-home buyers are active—making up about 25% of all property purchases in early 2025.

Thinking of buying? Waiting could mean paying more, as prices and demand are rising.

Building and Renovating: Faster and Potentially Cheaper

• Fast-Track Approvals Act (from December 2024) speeds up consents for large housing and infrastructure projects, helping developers get started sooner.

• Building consent changes will make it easier to swap materials or make minor design tweaks without lengthy new consents, reducing delays and costs.

• Insulation standards: There’s talk of relaxing some insulation rules to cut building costs, but recent research shows the actual cost of meeting current standards is much lower than previously reported—sometimes as little as $2,179 extra for a typical home. Weigh the long-term benefits of a warmer, more efficient home before opting for lower standards.

What Should You Do Next?

• Review your KiwiSaver: Make sure your contributions are set at a level that will help you reach your goals, especially as government support decreases.

• Start early: If you’re a teenager or have teenagers in your family, now’s the time to start saving and take advantage of new eligibility rules.

• Stay informed: Watch for updates on social housing and the Accommodation Supplement if you’re renting or on a tight budget.

• Act sooner rather than later: With house prices forecast to rise and interest rates easing, delaying your purchase could mean paying more down the track.

• Get advice: If you’re unsure about your options, talk to a mortgage adviser or KiwiSaver expert.

In summary:

Budget 2025 brings important changes for first-home buyers and KiwiSaver members. The government’s contribution is dropping, but employer and employee rates are rising, and more young people can now get a head start. With house prices and demand on the rise, being proactive with your savings and plans is more important than ever.