Buying your first home is an exciting step to take but it can also be overwhelming when it comes to your finances. If you’ve been in the KiwiSaver scheme for at least three years and you meet the eligibility requirements, you may be able to withdraw your KiwiSaver savings to put towards buying your first home! Lets take a look at what is required to do this.
KiwiSaver first home Withdrawal
If you wish to withdraw from your KiwiSaver you can withdraw everything in your account except:
$1,000; and money that has been transferred into your KiwiSaver account from a complying Australian superannuation scheme.
How do I know I am eligible?
To be eligible to withdraw from your KiwiSaver you:
- Need to have been in the KiwiSaver fund for a minimum of three years
- Over 18 years of age
- You can’t have previously withdrawn from your KiwiSaver to buy a house or some land.
- You have to be intending to live in the house that you buy and it must be in New Zealand.
- If you have owned a house in the past there are some circumstances where you may be able to use KiwiSaver to go towards this purchase however you will need to click here to contact someone to find out if you are eligible.
I am eligible what next?
If you have found out that you are eligible to withdraw from your KiwiSaver then there are two ways KiwiSaver can help you into your first home.
1. Make a first home withdrawal from your KiwiSaver account. This is the money you have put in and the earnings on the fund.
2. Apply for a HomeStart grant from Housing New Zealand. This is money available to you to help towards your deposit available from the government if you meet certain criteria. It could be as much as $10,000 per person.
What do you need to do?
When you apply for your home loan pre-approval, you need to provide a KiwiSaver eligibility letter. This letter includes confirmation of your eligibility to make a first home withdrawal, as well as an estimate of the withdrawal amount. Your KiwiSaver manager can provide you with an eligibility letter and a first home withdrawal application form. Once you have found the house you wish to buy, it is important to apply for your first home withdrawal early. If you are eligible, you can choose to put your KiwiSaver savings towards the deposit while your sale and purchase agreement is still conditional.
How much money can I take out?
If you are planning on using just your KiwiSaver funds then there are no limits, if you are applying for the HomeStart grant there are property price and income caps.
There are house price caps in place, depending on where you live and whether you’re buying an existing property or building a new home, click here to find out more.
You must also live in the property that you purchase for at least six months after purchasing, as you are not allowed to use your KiwiSaver money for an investment property. There are some circumstances in which you may use your KiwiSaver money if you have previously owned a home, and our advisers will be able to guide you through this process.
Buying a home can be a hard process but having KiwiSaver in place to help you into your first home can be a life saver! If you have any questions about KiwiSaver or wish to get KiwiSaver put in place please contact us today.
Selecting the right KiwiSaver Fund for you
Its important to understand the fund you are in, over the last few years returns have been stellar in the share market. However, they can go up and down so knowing your risk profile is key. If you want some advice on this, please talk to one of our advisers.