How We Propose to Fund This Initiative: A Sustainable Model for the Future
The Government can afford to do this, and it should.
This funding model demonstrates that over a four-year period 160,000 people can gain access to affordable housing with no net Government borrowing, no spending cuts, practically no market interference and minimal bureaucracy. A very worthy outcome.
NZ$BN | Year 1 | Year 2 | Year 3 | Year 4 |
|---|---|---|---|---|
Operating Allowance (New spend) average F23/F24 | 2 | 2 | 2 | 2 |
Prior year budget | 0 | 2 | 4 | 6 |
Sell Kainga Ora assets | 4 | 6 | 6 | 4 |
Borrow | 4 | 0 | (2) | (2) |
Funded | 10 | 10 | 10 | 10 |
A Sustainable Solution
Our approach is designed to become a 'normal' part of how we do things in New Zealand just like ACC and GST are today. The programme is amplified the longer and more consistently it runs.
Managing Your Interest-Free Loan: Simple, Secure & Fair
How we Propose your Loan is Safe and Easy to Manage
At Seed Capital for The Commons, we understand that buying a home is one of the most significant financial decisions Kiwis will ever make. That’s why we propose a straightforward process to ensure your interest-free loan is managed securely, with clear steps to access your funds and manage what happens if you change homes.
Getting the Money: The Role of Solicitors and IRD
When you qualify for an interest-free loan, you would work with your solicitor and the Inland Revenue Department (IRD) to ensure the loan process is seamless and transparent. Here’s how it works:
Loan Setup: After approval, your solicitor will handle the legal side of your home purchase, and the loan funds will be transferred directly to their trust account to pay for the house, just like you do for KiwiSaver funds now.
Repayments: These will happen as part of the sales process if you sell your house and do not buy another house in New Zealand. The Inland Revenue Department will advise your solicitor how much is owed as part of the sales process.
Debt Forgiveness: Easing the Burden Over Time
One of the most innovative aspects of our proposed programme is the debt forgiveness feature. After 15 years, your loan balance will start to decrease at a rate of $5,000 per year for 25 years. This gradual reduction helps ease the financial burden over time, making it possible for you to own your home outright sooner than with a traditional mortgage.
Selling Your Home
If you decide to sell your home before the loan is fully repaid or forgiven, the outstanding loan amount will need to be paid back when the sale is completed, if you buy another house in New Zealand, you can roll over the balance to your new home.
