First Home Buyer Sections - Your Guide to Buying Land in NZ
First home buyer sections offer an alternative path to home ownership that many overlook. While most first-time buyers focus on existing homes, purchasing a section and building new can provide better value, modern standards and the home you actually want. This guide covers everything first home buyers need to know about buying sections in New Zealand, including grants, loans and finding affordable land.
Why Consider Buying a Section?
- First Home Grants: New builds qualify for higher grants than existing homes
- Modern Standards: Built to current building code - warmer, drier, healthier
- Lower Maintenance: New home warranty, no deferred maintenance costs
- Customisation: Design your home to suit your needs and budget
- Growing Equity: Land value plus completed home often exceeds build cost
First Home Grants for Sections
Kiwis buying land to build a new home can access First Home Grants:
| Type | Individual | Couple |
|---|---|---|
| New Build Grant | $10,000 | $20,000 |
| Existing Home Grant | $5,000 | $10,000 |
Key requirements:
- 3+ years contributing to KiwiSaver
- Income under $95,000 (individual) or $150,000 (household)
- Land + build under regional price cap ($650,000 in Canterbury)
- Must not have previously owned property
- Must live in the home for minimum 6 months
KiwiSaver Withdrawal
You can withdraw most of your KiwiSaver for your first home:
- Must leave $1,000 minimum in account
- 3+ years membership required
- Can use for land purchase or combined land + build
- Includes your contributions, employer contributions and returns
First Home Loan Scheme
Kainga Ora's First Home Loan scheme helps with lower deposits:
- Only 5% deposit required (vs standard 20%)
- Available through participating banks
- Same income and price caps as First Home Grant
- Can be used alongside First Home Grant and KiwiSaver
Affordable Section Locations in Canterbury
| Location | Section Price | Total Build Cost |
|---|---|---|
| Kaiapoi | $220,000 - $280,000 | $580,000 - $650,000 |
| Rangiora | $250,000 - $320,000 | $600,000 - $680,000 |
| Rolleston | $260,000 - $340,000 | $610,000 - $700,000 |
| Timaru | $180,000 - $250,000 | $520,000 - $600,000 |
Deposit Requirements
Deposits for land purchase differ from existing homes:
- Standard land loan: 30-50% deposit typically required
- Construction loan: May allow 10-20% if building immediately
- First Home Loan: 5% deposit possible with Kainga Ora scheme
Combining KiwiSaver withdrawal + First Home Grant can significantly boost your deposit.
Building Costs Guide
Plan for total project costs:
- Build cost: $2,500-$3,500/m² for standard homes
- 3-bed 150m² home: $375,000 - $525,000
- Connections: $5,000-$15,000 for power, water, sewer
- Driveway/landscaping: $15,000-$40,000
- Consents and fees: $3,000-$8,000
Frequently Asked Questions
Is it cheaper to buy a section and build or buy existing?
It depends on location and what you're comparing. Building new gives you a modern home to current standards, while existing homes may offer more space for the same price. Consider total costs including land, build, connections and landscaping versus the existing home price plus any required renovations.
Can I use First Home Grant for just the section?
No - the First Home Grant is paid when you complete purchase of the land you're going to build on. You must have a building contract or clear intention to build. The grant applies to the combined land + build value, which must be under the regional price cap.
How long can I hold the section before building?
Most subdivisions require building to commence within 2-3 years (check covenants). However, your financing may require building sooner - some construction loans need building to start within 12 months. Plan your timeline before committing.
What if land + build exceeds the First Home price cap?
You won't qualify for the First Home Grant or First Home Loan if the total exceeds caps ($650,000 in Canterbury). Consider smaller house plans, more affordable locations, or standard bank financing with higher deposit.
Do banks lend for bare land?
Yes, but with stricter requirements than home loans. Standard land loans need 30-50% deposit. Construction loans combining land and build are more accessible with 10-20% deposits. First Home Loan scheme allows 5% for eligible buyers building immediately.
What's the difference between titled and off-plan sections?
Titled sections are ready to transfer now. Off-plan sections are sold before subdivision completion - you pay a deposit, then settle when title issues (often 6-18 months later). Off-plan may be cheaper but involves waiting and development risk.
Should first home buyers consider house and land packages?
House and land packages simplify the process with one contract and fixed pricing. They're particularly good for first home buyers wanting certainty. Compare package prices against buying section and building separately to ensure value.
What hidden costs should I budget for?
Beyond section and build: legal fees ($1,500-$2,500), connection fees ($5,000-$15,000), driveway and landscaping ($15,000-$40,000), building consent ($3,000-$5,000), loan establishment fees, and rates during construction. Budget 10% contingency for unexpected costs.