Harmans Lawyers
08 May 2023

Kiwisaver Withdrawals for First Home Buyers

All Articles & News, Residential Property

Buying your first home takes careful planning and perhaps more importantly serious budgeting and you need to be aware of what is available to assist you with this process.

Kiwisaver is a voluntary, work-based savings initiative to assist you with your long-term saving for retirement.   If you have been a member of KiwiSaver for 3 years, you may be able to withdraw some of your KiwiSaver savings to put towards buying your first home provided you intend to live in the property – it cannot be used to buy an investment property.  A first-home buyer is an individual who has not owned a house or land before either in New Zealand, or overseas.

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 in relation to realisable assets and level of income, and  an application needs to be made to Kainga Ora – Homes and Communities who will determine whether you are in the same financial position as a first-home buyer.

The amount available for withdrawal will depend on the contributions you have made, your employer’s contributions (voluntary and compulsory); returns on investment, and any member tax credits.  If you joined a KiwiSaver scheme prior to 21 May 2015, the Government made a `kick-start’ tax free contribution of $1,000.00 to new members.  You cannot access this payment if you wish to use your KiwiSaver for the purchase of a first home.  You must ensure you leave at least $1,000.00 in the fund following any withdrawal.

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 before looking for a house or land to purchase.  Pre-approval is valid for 180 days after which you need to make a new application.