New Zealanders used KiwiSaver to buy the first property

KiwiSaver’s First Home Withdrawal Scheme helps first-time buyers buy residential properties in New Zealand. For first-time home buyers, KiwiSaver withdrawals are a great place to start depositing enough money into a mortgage. If you are a first-time home buyer using KiwiSaver, it is important to understand all the rules for KiwiSaver first home withdrawals, what you can and cannot do with KiwiSaver first home purchase withdrawals, and how to ensure that everything goes well with KiwiSaver To help buy a house (or land).

Who can withdraw money from KiwiSaver to buy a home? To be eligible for the KiwiSaver First Home Use Withdrawal Program, you must:

• Must be the first property you purchase
• Have been a KiwiSaver member for at least three years;
• Having your KiwiSaver account with a KiwiSaver provider allows you to make savings withdrawals; and
• Intend to reside in the property to be acquired for at least six months

We recommend that you contact your personal KiwiSaver provider and review their personal policies regarding first home purchase withdrawals. If you are eligible to withdraw money from KiwiSaver, you may also be eligible for a down payment subsidy of up to $20,000.00 from the New Zealand Department of Housing – known as the HomeStart Grant.

If you qualify for KiwiSaver First Home Withdrawal, how much can you withdraw?

• All contributions to your salary (usually ranging from 3%-8%).
• All of your employer’s contributions to you (usually 3%)
• All investment income and interest
• All tax credits are refunded
• After withdrawal, you need to keep at least NZD 1,000 in your KiwiSaver account

If you once owned a property in New Zealand but have sold it and clearly don’t have any property at the moment, can kiwiSaver be taken out now to help buy it?

If you are someone who has had a house in the past but does not currently have a house in your name, you may still be eligible to withdraw that fund, which needs to be applied through your program provider; However, New Zealand’s Ministry of Housing Kāinga Ora initially needs to determine if you are eligible. If you are considered to be in the same financial situation as a first-time home buyer, you will need to forward the letter produced by Kāinga Ora to your KiwiSaver program provider to assist you in applying for a withdrawal of your KiwiSaver contributions.

You will first need to apply to the New Zealand Department of Housing for KiwiSaver’s first home purchase withdrawal request from the former homeowner and wait for approval from the New Zealand Department of Housing; These applications take at least 20 business days. You can do this yourself on the Housing New Zealand website without the help of a lawyer, and the online system is very convenient.

If you are considered to be in the same financial situation as a first-time buyer, you will receive confirmation from housing NZ that you are eligible for a withdrawal from your first home purchase (although in fact you are not buying a property in New Zealand for the first time). Upon receipt of this confirmation, you will need to contact your personal KiwiSaver provider and provide a KiwiSaver First Home Purchase Withdrawal Confirmation to obtain pre-approval for the withdrawal. However, whether you can withdraw money is ultimately up to your KiwiSaver provider.

What kind of “former homeowner” can be considered eligible for a first home purchase fund withdrawal program?

If you, as a homeowner who has previously had a home, apply for a KiwiSaver First Home Purchase Withdrawal Decision, whether you meet the following criteria:

• You didn’t withdraw your KiwiSaver funds to buy a house before
• You have been part of the KiwiSaver program for at least three years
• You previously owned the property but no longer own any interest/share of the property (this excludes ownership of gross profit land)
• For existing/used properties in the area you are purchasing, your total realisable assets do not exceed 20% of the maximum rate limit

New Zealand Housing Department Kāinga Ora considers the following assets to be realisable:

• Funds in bank accounts (including term and term deposits)
• Stocks, stocks and bonds
• Investments in banks or financial institutions
• Building society shares
• Any amount paid to or held by a real estate agent or lawyer as a deposit for property
• Boats, yachts or motorhomes worth more than $5,000
• Additional vehicles that are not used as your usual means of transportation (e.g. classic motorcycles or collector’s cars)
• Other personal assets valued at over $5,000

I am not currently enrolled in KiwiSaver, but with an employer pension plan (such as working in a large enterprise or a government agency), can I withdraw money to buy a house?

There are some non-KiwiSaver employer pension plans that also allow for first-time home purchases in a manner similar to KiwiSaver.

Since non-KiwiSaver plans are not subject to the same requirements as KiwiSaver providers, you must contact your pension hosting financial services provider and learn about the following:

• Whether first home purchase withdrawals are allowed
• Whether you meet the specific eligibility criteria for withdrawals
• How much you can extract
• What are the conditions for withdrawal
• How long is the time period for application

Can I buy a house with my KiwiSaver with my spouse/partner?

If your spouse/partner did not own a home before, you can both withdraw KiwiSaver at the same time and pool the two sums of money to buy a house together. You two need to separately kiwiSaver providers (if not one provider) to obtain pre-approval and submit a withdrawal request.

If your spouse/partner previously owned a home, you have not previously had a property; Then only you can pick up your home from KiwiSaver to buy it. However, the fact that your partner is already a homeowner doesn’t affect your ability to extract KiwiSaver.

This situation is more complicated, it is recommended to find a lawyer to make an agreement, in case the two divorce in the future, the common property needs to be divided, then the KiwiSaver part of the “down payment” is still better to become a notarization or agreement before marriage property.

Can I use KiwiSaver First Home Withdrawal to buy a home in the name of a family trust?

This usually depends on your KiwiSaver provider. If the home will be owned in the name of a family trust, many KiwiSaver providers will not allow you to withdraw KiwiSaver funds, but some providers will.

KiwiSaver providers that allow you to withdraw funds to purchase a home owned in the name of the trust require the following:

• You must be the trustee and beneficiary of the trust that owns the property
• You cannot be a beneficiary of another trust that owns the property (i.e. you are also a beneficiary of another trust and the trust has a property in its name)
• When you sign the Sale and Purchase Agreement, the name of the purchaser must be written as “(KiwiSaver/full name of the purchaser) as trustee (name of the family trust)”
• You must intend to make the property your primary residence and live there for at least six months

Can kiwiSaver funds buy non-New Zealand properties?

No way.

Can kiwiSaver funds buy Māori land properties?

Yes, it is the same as other conditions for buying a first property using KiwiSaver, but also to obtain information about this gross profit land and submit it to the KiwiSaver provider.

Can I buy an investment home with KiwiSaver’s first home purchase?

No.

Can I buy land with KiwiSaver’s first home (there is no house on it)?

Yes, you can use this money to buy land, but only if you don’t currently have any land or property in your name, and the house built on this land will be your first house.