First-Home Buyers and Homeowners: Here’s What Changed in Budget 2025
Cut in the Government Match
From 1 July 2025, the government match drops to 25¢ per $1 saved (down from 50¢), with a maximum of $260 per year, and will phase out entirely for earners above $ 180,000.
If you're saving for your first home, this means less free top-up cash from the government—so you’ve got to put in more of your own.
Contributions Go Up—but Gradually
Default KiwiSaver contributions rise from 3% → 4% in stages:
1 April 2026: 3.5%
1 April 2028: 4%
Good News for Teens
From 1 July 2025, 16–17-year-olds can get the government contribution.
And from Apr 2026, employers must contribute too—meaning your teenager could start saving with a boost!
If you're planning to buy soon, review your KiwiSaver settings now and consider increasing your contributions to account for the change.
First‑Home Buyer Help: No New Cash Boosts
Despite rumours, there is no new subsidy (such as covering 40% of a new home purchase)—budget documents don’t support unofficial reports.
However, first-home KiwiSaver withdrawals remain free—but they’ve played a role in pushing home prices up in the past.
Keep using KiwiSaver wisely. Any additional incentives may be unavailable, so focus on your savings rather than relying on surprise handouts, including those from unconfirmed sources.
Building More Social & Affordable Homes
Here’s where the government is putting its energy:
$128m over four years to build 550+ social homes in Auckland.
Another $82 million given to community housing groups to accelerate progress.
A Flexible Fund ($41 M operating + $250 M capital) launching mid‑2027, aiming for 650–900 more homes regionally.
If you’re struggling, keep an eye on upcoming social housing rollouts. It won’t solve your ownership goals, but it might offer a stepping stone or rental stability.
Accommodation Help for Homeowners (From 2027)
From April 2027, the Accommodation Supplement thresholds are increasing, meaning more low-income homeowners and renters will qualify.
Over the 2025–29 period, this change saves the government $19 million while helping people pay their rent or mortgage costs.
If you’re on a tight budget and own a home or rent, consider rechecking your eligibility in 2027. Additional support may be available to you.
Market Outlook: Prices & Rates
Forecasts indicate that house prices will rise from 0.3% (mid-2025) to 5.6% (mid-2026), then average 5.3% annually through to 2029.
Even without that, other indicators suggest a 3.8% increase in 2025, particularly as interest rates decline.
First-home buyers are active—25% of purchases in early 2025 were made by first-time buyers.
Thinking of buying? Delay could cost you—prices are moving, and interest rates are helping fuel the climb.
Easier Building & Lower Construction Costs
Fast‑Track Approvals
The Fast-Track Approvals Act (December 2024) speeds up consents for large housing and infrastructure projects through expert panels instead of ministers.
Less Insulation to Save Dollars
Some insulation standards may be relaxed to reduce construction costs by $ 40,000–$50,000 per house, but be aware of potential trade-offs in comfort and energy efficiency.
If you're building or renovating, use faster consent pathways. And weigh the cost versus long-term living quality before opting for cheaper insulation options.
Summary: What Budget 2025 Means for You
If you're planning to buy your first home, Budget 2025 introduces a few important changes you should know about. The government’s KiwiSaver contribution has been halved—from 50 cents to 25 cents for every dollar you put in, capped at around $260 a year. That means you’ll need to rely more on your own savings and employer contributions to build your deposit.
On the other hand, KiwiSaver is being made more accessible to 16- and 17-year-olds, and contribution rates are gradually increasing to help boost long-term savings.
For younger savers and those just starting their journey, this is a good time to review your KiwiSaver settings and consider increasing your regular contributions if possible. The earlier you start, the better positioned you'll be when you're ready to buy.
For existing homeowners—especially those on lower incomes—there’s some good news, though it’s still a few years away. From April 2027, the Accommodation Supplement thresholds will be updated, meaning more people may qualify for financial assistance with their housing costs. If you're currently not eligible, it's worth checking again closer to that date.
The government is also investing in more social and affordable housing, particularly in Auckland. Over 550 new homes are expected to be built by 2026, with additional developments planned through a new Flexible Housing Fund. While this doesn’t directly benefit homebuyers, it could help reduce demand pressure in the rental market and improve overall housing supply.
House prices are forecast to rise again in 2025, with estimates ranging from 3.8% to 5.6% annual growth. As interest rates continue to ease, more buyers are returning to the market, particularly first-home buyers, who now account for approximately 25% of all property purchases. If you’re thinking of buying, waiting might mean paying more down the track.
Finally, there are changes coming that aim to speed up the building process and lower construction costs. The Fast-Track Approvals Act will help developers get consent for large projects more quickly, and proposed updates to insulation standards could reduce the cost of new builds by $40,000–$50,000 per home. This could make homeownership more achievable, but may also raise questions about long-term energy efficiency.
In short, Budget 2025 makes it clear: if you want to own a home, you'll need to be proactive. Keep saving, stay informed, and get advice early—especially as the market shifts.