How can KiwiSaver help you buy your first home?
Buying your first home is exciting but getting your foot on the property ladder can be tough. That’s why KiwiSaver was designed with a first home withdrawal facility. The KiwiSaver first home withdrawal allows you to withdraw some of your KiwiSaver savings to buy your first home. To be eligible to do this:
- you must have been a member of KiwiSaver (or a complying superannuation fund) for three years or more;
- you must not have previously made a withdrawal from a KiwiSaver scheme to buy a home;
- with some exceptions, this will be your first time owning your own property or land (or you qualify as a previous home owner);
- you intend to live in the home that you are buying or buying an interest in (if Maori land) (or you intend to build a home to live in on the land that you are buying); and
- the property or land is located in New Zealand.
What are the changes to the KiwiSaver first home withdrawal?
As of today, 1 April 2015, there are a number of changes to KiwiSaver for first home buyers.
1. From 1 April 2015, you will be able to withdraw the annual Government contributions (member tax credits) as part of your first home withdrawal:
What can be withdrawn?
- Your own contributions
- Your employer's contributions
- Annual Government contributions (member tax credits)
- Investment returns
What cannot be withdrawn?
- Government kick-start contribution
- Money transferred from an Australian complying superannuation fund
If you are currently, or have ever been bankrupt, this may affect how much you can withdraw.
This means that, in effect, you may be able to withdraw all of your KiwiSaver savings, excluding the $1,000 Government kick-start contribution
2. You will qualify for a first home withdrawal not only if you have been a member of KiwiSaver, but also if you have been a member of a complying superannuation fund for three years ; and
3. First home withdrawals will be available for home ownership on Maori land.
It’s also important to know
The KiwiSaver first home withdrawal will be part of the money you put into your first home but currently it cannot be part of any initial deposit you need to pay the real estate agent or vendor. You'll need to plan for and fund any deposit that is required when you sign an unconditional sale and purchase agreement (or are successful at auction).
From 1 June 2015, legislative changes will allow a first home withdrawal to be used to make deposit payments in certain circumstances. Various restrictions may mean that you will not be able to use your first home withdrawal for deposit payments in all sale and purchase transactions, e.g. auctions. Your solicitor or conveyancing practitioner can advise you further in this regard.
If you've already owned a home
If you do not currently own a home or property but have done previously and you think you may be in a similar financial position to a first home buyer, you may be eligible for approval by Housing New Zealand Corporation (HNZC) as a previous home owner.
KiwiSaver HomeStart grant
HNZC may also provide eligible KiwiSaver members with a KiwiSaver HomeStart grant of up to $5,000 for an existing home or up to $10,000 for building a new home or purchasing a newly built home. HNZC can confirm if you are eligible for this grant (minimum contribution levels and certain income thresholds and regional house price caps apply).
If you’re thinking about buying your first home, call us on 0800 272 738 or visit your nearest branch to talk to us about your options.