Withdrawing Your Kiwisaver Funds To Purchase Your First Home?
How long do I need to be in KiwiSaver to be eligible?
As a first home buyer you may be able to make a one-off withdrawal of most of your KiwiSaver savings – however, you would need to have been a contributing KiwiSaver member for at least three years.
Second chance buyer? You may still be eligible to withdraw your KiwiSaver funds if you have owned property previously, Housing New Zealand will need to determine that you are in the same financial position as a first home buyer.
So, how much can you withdraw?
your contributions
your employer's contributions (voluntary and compulsory)
returns on investment
any Government contribution
You are required to leave a minimum balance of $1,000 in your account.
How long does the approval application take?
KiwiSaver withdrawal applications can take between 10-15 working days depending on your provider (these days start from the date your provider receives your application). Whether you are intending on using your KiwiSaver funds towards your deposit or settlement purchase price, it is extremely important to complete your application and required documents in the time frame we advise you. As you do not want to put yourself in a situation waiting for your KiwiSaver funds to be released, and leaving you in default of your contract obligations- this could end up being very costly for you.
Can KiwiSaver First Home Withdrawal Funds be used as your contract deposit? Aka, deposit traps
If you are intending to use your KiwiSaver funds as part, or all of your deposit, best practice is to have this confirmed between the parties in your contract agreement (further terms of sale). In addition the KiwiSaver funds should be paid to the vendor’s solicitor’s trust account, no other account.
Why, you ask? Well, some KiwiSaver providers make restrictions on the funds being released to the vendors, understandably, this may pose a problem for a vendor requiring these funds for their proposed purchase deposit.
Are you looking to use your KiwiSaver to put towards purchasing a home? We can help you, click below to check out our Nest Buyers Package.
So, what’s next?
You will need to download and print your KiwiSaver provider’s application from their website. This application form will advise you the identification and proof of address documents they require to be certified, there will also be a statutory declaration which we would advise you to sign in front of a Justice of the Peace. Not all providers have the same requirements as to documents, so it is important to read yours carefully.
When you go to see your Justice of the Peace, please take with you your original documents and the copies of the same for them to certify.
After your application form is checked and the conveyancing professionals undertaking certificate is completed, we would attach the required documents it would then be our turn.
After your application form is checked and the conveyancing professionals undertaking certificate is completed, we would attach a copy of the sale and purchase agreement and confirm the date your funds are required, then send your completed application to your provider for their approval.
Once approved your provider will deposit your funds into our trust account to be held for the purchase of your property. Beware, we can not use these funds for any other matter, or pay these to you.
Are there any other grants available?
In addition to a KiwiSaver savings withdrawal, there’s also the KiwiSaver Kainga Ora First Home grant. If eligible, the government may also give you up to $5,000 towards buying an older, existing home, or up to $10,000 towards buying a new home or land to build a new home on.
Visit the Kainga Ora First Home Grant website below, or let me know if you would like some information on this.
Please click here to obtain a free copy of our KiwiSaver First Home Withdrawal Checklist, a great resource to help you on your way!
Jo Shannon is the founder of Nest legal & conveyancing. A Conveyancing Practitioner Jo lives with her family in the beautiful Bay of Plenty. Apart from all things property, Jo also loves perma-culture gardening, walking round the Mount and nice wine.