The Things You Ought To Know
Kiwisaver has two features to help you buy your first home:
- The Kiwisaver Home Start Grant
- The Kiwisaver First Home Withdrawal.
Kiwisaver Home Start Grant
This was introduced on 1 April 2015 replacing the Kiwisaver First Home Deposit Subsidy. Like the Kiwisaver First Home Deposit Subsidy, the Kiwisaver Home Start Grant provides eligible first home buyers with a grant of up to $5,000 for individuals and up to $10,000 for couples to put towards the purchase for an existing/older home. In addition, the new Kiwisaver Home Start Grant also provides eligible first home buyers with a grant up to $10,000 for individuals and up to $20,000 for couples to help purchase a brand new home. From 1 April 2015, eligible members can withdraw their Kiwisaver savings (including tax credits). However, at least $1,000 must remain in the Kiwisaver account.
The Kiwisaver Home Start Grant is administered by Housing New Zealand. However, the Kiwisaver First Home Withdrawal is administered by your Kiwisaver Scheme provider.
Kiwisaver First Home Withdrawal
Our advice is that if you are buying your first home and want to withdraw your Kiwisaver contribution, then you will need to apply directly to your Kiwisaver Scheme provider for your First Home Withdrawal. At the same time you should re-familiarise yourself with Kiwisaver, noting especially your length of contribution to the Scheme and how much you have been contributing over the years. We can assist you with this.
You need to be aware that you will only be able to withdraw your Kiwisaver for your first home if you have been a member of Kiwisaver for at least 3 years and that the property you wish to purchase is the property you intend to live in (it can not be used to buy an investment property). The important thing to note in regards to the deposit options is that previously your Kiwisaver saving and Home Start Grant could only be accessed on settlement. As of 1 June 2015 you may be able to use your Kiwisaver savings and the Home Start Grant for deposit payments before settlement eg initial or progress payments for homes bought off plans. However there are some circumstances such as buying at auction where this may not be possible.
We recommend that if you want to use your Kiwisaver towards an initial payment for a home then you should get in touch with us for assistance.