Kiwisaver – First Home Withdrawal
First home buyers may be entitled to apply for a first home withdrawal to purchase their first house. A first home buyer is an individual who has not owned a house or land before either in New Zealand or overseas. The following will apply:
- You have been a member of KiwiSaver for at least three years; and
- You intend to live in the property and the property must be in New Zealand.
You are able to withdraw your contributions to the scheme and your employers contributions to the scheme but you cannot withdraw the initial $1,000 contribution from the Government.
If you have previously been a member of an Australian superannuation scheme and have transferred the balance to your KiwiSaver, unfortunately you cannot use the amount transferred.
If you are buying your first home, you should apply to your KiwiSaver provider prior to commencing the purchase process to ascertain your eligibility and requirements for withdrawal of your savings. You can request pre-approval from your provider if you want to find out if you are eligible and this is valid for 180 days after which you need to make a new application.
If you have owned a house or land before either in New Zealand or overseas, you may qualify for a second chance withdrawal to purchase your new home. There are certain conditions which need to be met and an application needs to be made to Housing New Zealand who will determine whether you are in the same financial position as a first home buyer.
Once you have an unconditional agreement to buy your first home, your lawyer will need to write to your KiwiSaver provider. Your KiwiSaver provider will require copies of your ID, proof of address, etc which have been witnessed by a lawyer.
Most KiwiSaver providers require at least 2 weeks from receiving your lawyer’s letter to process the application, so any settlement date for the purchase of your home will need to be at least 2 weeks from the date all conditions of your agreement are satisfied. Then, on the settlement date, your KiwiSaver provider will send your KiwiSaver money directly to your lawyer.
KiwiSaver – Home Start Grant
First home buyers may also be entitled to a first home deposit subsidy which is administered by Housing New Zealand. You can apply for the deposit subsidy:
- if you are buying a house or land to build a home;
- are over 18 years of age;
- have been a member of KiwiSaver and have contributed to a KiwiSaver scheme for three consecutive years;
The amount of the grant depends on whether the home is existing or newly built. You could get:
- 1,000 a year you have been a KiwiSaver member, up to a maximum of 5,000.00 if your first home will be an existing home; or
- 2,000.00 a year for each year you have been a KiwiSaver member, up to a maximum of 10,000.00, if your first home will be newly built.
The Government pays this directly to your solicitor on settlement day – it does not come out of your KiwiSaver account.
Some criteria applies and to be eligible:
- You have to have a threshold household income (before tax) of less than $85,000.00 per year or less than $130,000.00 per year (for two or more people)
- Have a 10% deposit or more of the purchase price, including the addition of the grant
- You will need to live in the house you have purchased for a minimum of six months from the settlement date otherwise you will be required to pay the subsidy back.