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KiwiSaver is a great way to help save for a deposit to buy your first home.

This article looks at the KiwiSaver rules for taking money out of your KiwiSaver Account, to help you buy your first home (known as a first home withdrawal). Mostly, this will be to help buy your first home but in some circumstances, it may be available to people who have previously owned a house under the second chance provisions (see page 2).

If you are eligible for the first home withdrawal, you may also be eligible for the first home subsidy. The first home subsidy is administered by Housing New Zealand, outside KiwiSaver. See the separate article on the first home subsidy.

First home withdrawal

The first home withdrawal option under KiwiSaver lets you take money from your KiwiSaver Account to help you purchase your first home. You apply to the Trustee. 

Available after 3 years’

You can request a first home withdrawal at any time starting three years after you first joined KiwiSaver, or if earlier three years after the IRD “received” your first contribution to KiwiSaver. Received by the IRD means the 15th of the month your employer first deducted money from your pay for KiwiSaver.

Note that the test is a three year membership test. It is not a three years’ saving test. However, the more you save and the longer you have saved, the more you will be able to take out.

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Take out everything but the government money

If you are eligible, you can withdraw your savings, your employers’ savings in respect of you and the investment earnings on the total savings. You cannot withdraw the government payments (i.e. the $1,000 kick-start and the $2 for $1 annual member tax credits) - these must stay for your retirement. 

First home and second chance

The first home withdrawal option is to help buy your very first home or property. Therefore you can’t normally have owned a property by yourself or with someone else. However, if you have previously owned a home, but no longer have a share in a property, you may be eligible if you have not made a first home withdrawal from KiwiSaver before and you are in a similar position to a first home buyer in terms of your assets, income and liabilities. If this applies to you, you need to contact Housing New Zealand to get a certificate from it that you are in a similar financial position to a first home buyer. It is often referred to as a “second chance”.

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Where you will live

The first home withdrawal must be for a property which is, or intended to be, your ‘principal place of residence’. You cannot use the first home withdrawal option to purchase an investment property, unless you will also live in it, or a holiday home. You do not need to be the sole buyer. You can be one of many buyers or owners. 

Paid to the seller through your solicitor

The withdrawal benefit is paid to your solicitor who will pay it to the seller. Your solicitor will be required to provide:

• a copy of the agreement for the sale and purchase of the property, showing you as a purchaser;
• an undertaking that the agreement is unconditional at the time the trustee makes the payment;
• an undertaking that the funds will be paid to the seller as part of the purchase price or, if the settlement is not completed by the due date (or any extended date) will be repaid back to your KiwiSaver Account.

First home withdrawal statement

If you would like a statement that sets out details of how much you can take out to help with the purchase of your first home, contact SuperLife. Your bank may require this as part of the pre-approval of a mortgage and it may help you plan the finances for your purchase.

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Request a first home withdrawal

To make a first home withdrawal, complete and sign the First Home Withdrawal form and give it to your solicitor. Your solicitor must sign the legal confirmation where indicated and attach the information required from them.

You must also sign the form where indicated.

You or your solicitor should then send the completed form, together with the documents required to SuperLife Limited.

Second chance

Even though you have previously owned property, you may still be eligible for the subsidy and savings withdrawal.  For more information on this, check out the Housing New Zealand website www.hnzc.co.nz/kiwisaver.  In simple terms, you must:

• be 18 or older; and
• not currently own a home/property; and
• have household income below $100,000 (if 2 or fewer people are buying the house) and below $140,000 if 3 or more people are buying the house.
• have realisable assets below 20% of the maximum house price value of $300,000 ($400,000 if buying in Auckland City, North Shore City, Rodney District, Wellington City and Queenstown Lakes District).

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