KiwiSaver members who qualify for the first home deposit subsidy will not be taxed on the subsidy, Revenue Minister Peter Dunne has announced.
“Changes made to the tax rules by Order in Council this week allow the deposit subsidy to be treated as a social assistance suspensory loan.
“Provided recipients meet all conditions and live in the home for at least six months, there will be no requirement to repay the loan. Normally the tax rules would treat such ‘forgiven’ debts such as income, which would be taxable.
“Changing the tax rules to treat the subsidy as a social assistance suspensory loan will be good news for the recipients of the subsidy when it becomes available on 1 July,” Mr Dunne said.
KiwiSavers who have contributed to the scheme for a minimum three years and who are looking to buy their first home, but who have difficulty raising the deposit may be eligible for the deposit subsidy.
KiwiSavers who are not first-home owners, but are also having difficulty saving for a deposit on a home may also be eligible for the subsidy.
The subsidy provides for $1000 for each year of contribution, up to a maximum of $5000 and is administered by the Housing New Zealand Corporation.
The rule change making the first home deposit subsidy a social assistance suspensory loan for tax purposes was made by Order in Council on Monday 26 April.
Source: http://www.taxpolicy.ird.govt.nz/news/2010-04-29-no-tax-kiwisaver-first-home-subsidy
