KiwiSaver and your first home

At Kiwi Wealth, we get that buying a home is one of the biggest sources of stress in our lives. We’re here to support you to make the most of the journey by:

  • Helping grow your KiwiSaver investment for your deposit
  • Helping to walk you through the first home withdrawal process.

Whether you’re years away from buying a house or about to begin the process, a good place to start is to check which KiwiSaver investment fund might be right for you – the amount of risk you choose can vary depending on when you're planning to buy your house.

If you're not sure what type of property you want to buy for your first home, these five property options for first home buyers might provide some inspiration.

And if you’re already looking, or your first home purchase is imminent, check out our guide below to using KiwiSaver to help you get the keys to your new front door.

Stage 1: Checking your eligibility

To qualify for a first home withdrawal you must meet the following criteria:

  • You need to have been in KiwiSaver or a complying superannuation fund for a minimum of three years.
  • You can only make a KiwiSaver first home withdrawal once.
  • If you’ve owned property before, you may qualify for a second chance home buyer withdrawal. You may also qualify for a First Home grant. To check eligibility, contact Kāinga Ora.
  • KiwiSaver first-home withdrawal is only available to applicants who want to buy homes or land in New Zealand and/or have the right to occupy Maori land.
  • You need to live in the home or land you intend to buy. Investment properties do not qualify.

Stage 2: Making a withdrawal

Check your KiwiSaver balance in myKiwiWealth and work out how much you want to take out. If you’re with Kiwi Wealth you can log in at the top of this page.

  • When estimating how much you can withdraw, factor in that you'll need to leave a minimum of $1,000 in your KiwiSaver account.
  • Be aware you cannot withdraw any amount transferred from a complying Australian superannuation scheme. Members with UK funds should contact us for further details.
  • Check your KiwiSaver First Home grant eligibility. You could get up to $5,000 for an existing home or $10,000 for a new build. Contact Kainga Ora for criteria.
  • Any amount approved for your withdrawal is subject to market performance until it is ready to pay, which will happen in the next weekly rebalancing cycle. This will mean the amount you're paid could differ from your current balance.

How much can you borrow?

Understanding how much you can borrow is the first step of hunting for houses you can afford. Our sister company Kiwibank has Mobile Mortgage Managers who can come and visit you to chat through your house-buying journey and help you work through how to get prepared. To get a sense of how much you might be able to borrow, you can try their handy mortgage calculators.

Get yourself in the right fund

How you manage your KiwiSaver investment can affect your balance. The timeframe around when you’re planning to buy a house can also be an important factor. If you’re planning to buy your first home in the next 12 months, a more conservative investment fund may be more appropriate than opting for a growth fund.

Stage 3: Getting ready for house-hunting

Now you have an idea about what you can afford, the house-hunting can begin. It’s worthwhile understanding what the steps are should you find a home that you want to put an offer in on. 

Stage 4: Making an offer

While your property lawyer will manage the paperwork, it’s important you understand the ins and outs of the process and the lead time your KiwiSaver scheme provider needs. This may take up to 15 working days.

Ways to buy a house

There are three main ways to buy a house in New Zealand:

Auction
Your KiwiSaver investment can’t be used towards a deposit if you’re buying at auction. If you’re buying property in this way, your KiwiSaver money will be used at settlement.

Offer and negotiation
A real estate agent will act as your go-between with the seller during price negotiations. Allow your solicitor plenty of time to organise the withdrawal of your KiwiSaver investment and to complete the paperwork required.

Tender
Once the seller has chosen the best written offer, they may choose to negotiate. Alert your solicitor if you are successful to allow time for KiwiSaver investment to be transferred and paperwork to be completed.

After your offer is accepted

When an offer has been accepted, in addition to the first or second chance home withdrawal form, your property lawyer will need to send your KiwiSaver Scheme provider:

  • A copy of the sale and purchase agreement
  • Confirmation of their Trust account number
  • A completed application form. This must include a statutory declaration, and certified copies of a) proof of identity and b) proof of residential address.
  • Any Kāinga Ora confirmation if you qualify for second chance withdrawal and/or proof you have the right to occupy Maori land (if applicable).

Approaching settlement

Once we have the required paper work it’s just a matter of waiting for your settlement day. The following will happen behind the scenes:

  • Your KiwiSaver first home withdrawal, and if applicable, your First Home grant from Kāinga Ora, will be paid directly to your property lawyer on or before the settlement day.
  • Your property lawyer will check everything is in order (like checking the rates and utilities have been paid by the seller and are up to date).
  • A statement will be sent to your bank showing the amount required to settle the sale. Your property lawyer will then arrange for your loan to be drawn down and the money transferred to the seller.

Once that has been completed, all you need to do is get the keys and move into your new home.

Stage 5: Getting back on financial track

Now that you’ve moved in, and your KiwiSaver account has significantly reduced, it’s important to consider rebuilding your investment to help prepare for the retirement you want. Although paying off your new large debt ASAP may seem the best way forward, experts say KiwiSaver has a secret sauce that can really help investment balances quickly build up again and significantly increase your retirement savings: “free” money.

If you’re eligible you may receive:

  • employer contributions at a minimum of 3%
  • Government contributions up to $521 if you put in $1042 each KiwiSaver year (the KiwiSaver year runs from 1 July through to 30 June)

Combined, this approach can outperform repayment interest, which is why experts recommend getting back in the saddle with KiwiSaver as soon as possible.

This information is provided in a general nature only and should not be construed as or relied on as financial advice. This is not a recommendation to invest in a particular financial product or class of financial products. You should seek financial advice specific to your circumstances from a Financial Adviser before making any investment decisions.

Past performance is not a reliable indicator of future performance. The value of your investment may go up and down.