Using KiwiSaver to buy your first home

There are criteria you have to meet though, and each home buyer’s situation is different so it can get confusing. We asked our Facebook community for their questions on using KiwiSaver to buy a first home and then got Roger Clayton, ASB Head of Wealth products, to answer them.

Q. Can we use KiwiSaver to purchase a home from a family member?

A. Yes you can if you meet the eligibility criteria for a first home withdrawal. If you are purchasing a property from someone you know, it’s a good idea to talk to your bank or lender first to understand what their requirements are in this situation as specific conditions may apply.

Q. Can I join my KiwiSaver with my husband and my brother who lives with us to buy a house?

A. If you’re buying the property together and will all live in the property, then you could combine your KiwiSaver savings to put towards the purchase of your first home. You’ll each submit your own application and must individually meet the criteria, such as contributing to KiwiSaver for at least three years. This applies to any situation where the co-owners are eligible for a first home withdrawal and will be living in and owning the house together.

Q. Can you use KiwiSaver to build on land gifted to you by family, with this being your first property (so the entire mortgage will be the build)?

The first home withdrawal is available for the purchase of land in New Zealand but unfortunately is not available for the building of a home (unless on Maori land).

Q. Can you apply to withdraw your KiwiSaver savings for a holiday or to purchase a boat or a car?

A. No, unfortunately a withdrawal can’t be made for these reasons. KiwiSaver is a retirement savings scheme which allows you to withdraw from the fund for specific purposes. These purposes include financial hardship (e.g. serious illness), moving overseas permanently (to any country other than Australia), buying your first home and retirement. Here’s more information about withdrawing your KiwiSaver savings.

Q. Am I eligible for a second chance as I bought a home 17 years ago when I was 19?

A. If you've previously owned property but do not currently own a home, you may still be eligible to withdraw your KiwiSaver savings through the previous home owners withdrawal. The application for this is assessed and processed by Housing New Zealand so we recommend contacting them to find out if you’re eligible.

Q. Can I use KiwiSaver to buy our first home, even if my husband isn’t with KiwiSaver and has a different retirement savings scheme?

A. Yes you can withdraw your KiwiSaver savings for the purchase of your first home, even if your husband is not a member. The first step is to contact your KiwiSaver provider to see if you’re eligible and to request a balance estimate for a first home withdrawal.  You could also check if your husband’s superannuation is a complying fund; if so, he may be able to make a first home withdrawal. He would need to verify this with his retirement scheme provider.

Q. We are trying to use KiwiSaver to buy land then build our first home. But we’ve been told this isn’t possible and we must buy a house and land package. Why can’t we use our KiwiSaver to build our first home?

A. The first home withdrawal can be used to help you buy land that you intend to build a home on (if you're planning to live in that house). But you can’t buy the land and then use your KiwiSaver to contribute to the cost of building the house.  Like with any property, you'll need to apply to withdraw your KiwiSaver before you buy the land. The first home withdrawal isn’t just for house and land packages.

Q. Can I use KiwiSaver to buy my first house if my partner already has a house and is selling that to fund their half of the new house?

A. Yes, the first home withdrawal is assessed on an individual’s circumstances. As long as you are eligible and living in the house, the first home withdrawal can contribute to a joint purchase.

If you’ve got further questions about using KiwiSaver to help buy your first home or getting your deposit together, give us a call on 0800 803 804.