If you’ve been a member of Kiwisaver for 3 years you may be able to withdraw some of your Kiwisaver funds to put towards purchasing your first home. If you have previously owned a home but are in the same financial position as a first home buyer, you may also be able to withdraw some of your Kiwisaver funds as a second chance buyer.
At present, you are able to withdraw your contributions and your employer’s contributions plus any returns (i.e. interest earned) but not the $1,000.00 kick start or the annual tax credits. However, there have been discussions about the tax credits also being made available for the First Home Buyers withdrawal.
Prior to 1 April 2015, you may also be eligible to receive a First Home Deposit Subsidy. If you’ve been a member of Kiwisaver for 3 years and meet certain other criteria then you may be eligible for at least $3,000. $1,000 for every year you have been a member of Kiwisaver (with a maximum of $5,000 available if you have been a member for longer than 5 years). If you are purchasing your first home with another first home buyer they may also be eligible for the Deposit Subsidy.
To be eligible for the Deposit Subsidy you must have been contributing the minimum contribution as set out on the Housing New Zealand Corporation website (http://www.hnzc.co.nz/buying-a-house/buying-a-home-with-kiwisaver/first-home-deposit-subsidy/eligibility-checklist).
You must also meet the following criteria:-
- Earn a yearly income of $80,000 or less (before tax) if purchasing alone; or
- Earn a combined yearly income of $120,000 or less (before tax) if purchasing with another person; and
- Have a 10% deposit for the property you are purchasing; and
- You must live in the property for at least 6 months from the settlement date; and
- The purchase price of your property must be within the maximum house price caps:
- $485,000 in Auckland;
- $425,000 in Wellington City and Queenstown Lakes;
- $400,000 in Christchurch City and Selwyn District;
- $350,000 in Thames/Coromandel, Hamilton City, Western Bay of plenty, Tauranga City, Kapiti Coast, Porirua City, Hutt City, Upper Hutt, Tasman/Nelson and Waimakariri; and
- $300,000 in all other regions.
From 1 April 2015, the Kiwisaver HomeStart Grant will replace the Kiwisaver Deposit Subsidy. With the HomeStart grant you may eligible for up to $5,000 for an individual or $10,000 for a couple (much like the Deposit Subsidy). However, if you are purchasing a brand new home (i.e. yet to be built or recently built with its Code Compliance Certificate issuing within the preceding 6 months of applying for the HomeStart grant) you may be eligible for a grant of up to $10,000 for an individual or $20,000 for a couple.
As with the Deposit Subsidy the property you are purchasing must be within the maximum house price caps:-
- $550,000 in Auckland;
- $450,000 in Hamilton City, Tauranga City, Western Bay of Plenty, Kapiti Coast, Porirua City, Hutt City, Upper Hutt, Wellington City, Nelson City, Tasman, Waimakariri, Queenstown Lakes, Christchurch City, and Selwyn District;
- $350,000 in all other regions
With either the Deposit Subsidy or the HomeStart grant you will need to make an application to Housing New Zealand Corporation and are advised to give them plenty of time to receive your application and arrange the funds to be available on your settlement date.
The Kiwisaver withdrawal is arranged directly with your Kiwisaver Provider (unless you are a second chance buyer in which case you will need to receive confirmation from Housing New Zealand Corporation that you are eligible for the withdrawal.
If you are looking at purchasing using your Kiwisaver funds and/or the Deposit Subsidy it is best to talk to your lawyer first to ensure any purchase agreement you sign takes into account the extra issues that arise.