The KiwiSaver First Home Withdrawal and HomeStart Grants make it easier for many first home buyers.

If you have been in Kiwisaver for more than 3-years then taking advantage of a First Home Withdrawal to get your savings out makes a lot of sense.

If you’re eligible, using your KiwiSaver savings (a KiwiSaver First Home Withdrawal) to put towards purchasing your first home is a great way to get a bigger deposit.

The KiwiSaver scheme is a voluntary (at this stage) long-term savings scheme which came into operation from Monday, 2 July 2007.

The main purpose of the KiwiSaver fund is to help people with their own retirement savings, but participants can also use it to save a deposit for their first home.

Making A First Home Withdrawal

You must have been a KiwiSaver member for three or more years and contributed for a minimum of 3-years to be eligible to make a KiwiSaver First Home Withdrawal.

You can only withdraw money to purchase your first home – not an investment property.

If you have owned a home before you may still be eligible to withdraw your savings. This is known as a second chance and there are some restrictions on this but these have been changed a little to allow more people access to this option.

What Can You Withdraw From Your KiwiSaver?

If you’re eligible, you may be able to withdraw most of your KiwiSaver savings to put towards purchasing your first home.

Your KiwiSaver withdrawal may include:

• your members contributions
• any employer contributions (voluntary and compulsory)
• any returns on investment(s) received
• any member tax credits.

Funds transferred from an Australian Complying Superannuation scheme cannot be withdrawn for the purchase of a home.

You must leave a minimum balance of $1,000 in your account.

How To Apply For A KiwiSaver First Home Withdrawal

It is a simple process to make a first home withdrawal;

• If you are a first-home buyer, you will need to contact your KiwiSaver provider or complying fund provider to apply.
• If you are a previous home owner, you will still need to apply through your scheme provider; however Housing New Zealand will need to determine whether you meet the eligibility criteria for the second-chance withdrawal.

Currently there is an income limit for second-chance withdrawal, but the income limits are being removed on 1 July 2016 meaning a second-chance homeowner whose assets are small will be able to access their KiwiSaver funds to buy a home regardless of how high their income is. This was announced by Nick Smith on the 28th April – CLICK HERE to read the announcement.

What About Any First Home Buyer Grants

If you fit the criteria you may also be eligible for a Homestart Grant. 

The HomeStart Grants are designed to help people get into their first home and is effectively a “gift” for people that fit the criteria. Assuming you are eligible the grant is dependent on the type of property that you are buying (existing or new) and the time that you have contributed to KiwiSaver.

• If you are purchasing an existing/older home, the HomeStart Grant is $1,000 for each year of contribution to your KiwiSaver scheme:
  • 3 years of contributing = $3,000 (the minimum you can get)
  • 4 years of contributing = $4,000
  • 5 years of contributing = $5,000 (the maximum you can get).
• If you are purchasing a new home, a property bought off the plans or land to build a new home on, the HomeStart grant is $2,000 for each year of contribution to the scheme:
  • 3 years of contributing = $6,000 (the minimum you can get)
  • 4 years of contributing = $8,000
  • 5 years of contributing = $10,000 (the maximum you can get).

Housing New Zealand have developed an online calculator to help you estimate the HomeStart grant you could be entitled to.

For the KiwiSaver HomeStart Grant eligibility calculator and deposit calculator CLICK HERE.

These two new tools will help you work out if you are eligible for the KiwiSaver HomeStart grant and work out how much assistance KiwiSaver can provide towards your deposit.

Get More Advice

Of course a First Home Withdrawal is not going to be the solution for everyone, but it can make a huge difference to some first home buyers. It means you can access a larger deposit which makes your mortgage less or the house that you afford is of a greater value.

As a mortgage adviser I am here to help people buy their first homes and the First Home Withdrawal and HomeStart Grants make it easier for many first home buyers. Please contact me if you would like some help to understand how you can use your KiwiSaver to make getting into your first home easier.

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