Budget 2024: Newshub reveals Government set to scrap first-home grants

Newshub can reveal the Government is set to scrap the $60 million given to first-home buyers in grants in next week's Budget and redirect the money to social housing.

First-home buyer Mia Bright is in love with her new home. She bought the three-bedroom abode in Hamilton with the help of a $5000 Kāinga Ora grant.

"The house was $600,000, I had $55,000 in my KiwiSaver and that Kāinga Ora [grant] bumped me up to the 10 percent deposit that I needed to be able to buy the house. So, without that I really don't think I would have been able to get in here," Bright said.

First-home grants are a government contribution to first-home buyers. Buyers can get up to $5000 for an existing home or $10,000 for a new build if they earn less than $95,000 as an individual buyer or $150,000 as a household.

There are price caps for the houses you can buy according to regional prices.

"The way that housing prices are at the moment [and] other costs going up, it could been that the time I saved that extra $5000 I then need [an extra] $10,000 or $15,000 - so it really was essential for my timeframe that I needed to get into this house," Bright said.

In the year to February 2024, nearly 25,000 households bought their first home, in that time 10,500 first-home grants were paid out - meaning 42 percent of first-home buyers accessed the grant.

But there are question marks over its future. Bishop is reviewing all housing support initiatives and wouldn't commit to keeping the grants.

When asked whether he can guarantee first-home buyers that if they're looking to buy a house in the next six months the grants will still exist, Bishop said: "I can give them a guarantee that we are looking at all of the range of housing products that the Government provides."

Sources later confirmed to Newshub that the grants - worth about $60m a year - will be abolished in the Budget.

"I think it'd be devastating for first-home buyers. Myself and quite a number of my friends have all bought houses in the last two years and most of us did use that grant," Bright said.

"I don't think the Government cares about first-home buyers."

One of the Coalition partners might've let a Budget secret slip.

Asked whether the Government should scrap the first-home grants, NZ First Minister Shane Jones said "all matters in the Budget will be dealt with on Budget night".

Jones would not comment when asked to clarify if the Government is scrapping first-home grants in the Budget.

"As Mr Jones has said, any decisions that are related to the Budget will be made in relation to the Budget. We will have more to say about all of this in the coming days," Finance Minister Nicola Willis said.

Jenna Lynch Analysis: 

It is hard to argue with any money going toward social housing which provides homes for those who need it most in society. But arguably this is a massive political risk - first-home buyers are loud about their struggles. National actually introduced this grant when it was last in Government in 2017 due to the immense pressure on them from voters who either wanted their first home or wanted their kids to be able to buy one. 

The sell of this while giving $2.9 billion to landlords will be a tricky one - softened only slightly by the grants money being redirected to social housing.