How to complete a KiwiSaver First Home Withdrawal

Introduction

Applying for a KiwiSaver First Home Buyer Withdrawal is an important step in purchasing a first home.

Most of the first home buyers that I work with use a KiwiSaver first home withdrawal as part of their deposit. The First Home Withdrawal can be used as part of your deposit when going unconditional on the purchase of your property, or it can be used to settle on the property.

Eligibility requirement

The eligibility requirements on making a First Home withdrawal from your KiwiSaver investment as per the KiwiSaver are as follows:

1.       That you as the buyer has been a member of KiwiSaver or another complying fund for a period of 3 years.

2.       You must be a first-time buyer, intending to live in the home or land you buy.

3.       That you Buyer has never owned any land and is purchasing their first home or is a previous homeowner in the same financial position as a first home buyer (see below).

4.       You can’t have made a withdrawal from KiwiSaver to buy a home or land before.

You can withdraw everything from your KiwiSaver account except:

·         $1,000; and

·         Money that has been transferred into your KiwiSaver account from a complying Australian superannuation scheme.

Making an application

Time is of the essence when applying for a KiwiSaver First Home Withdrawal especially if you are going to use your KiwiSaver withdrawal when using the funds as part of your deposit when going unconditional upon your agreement. Most KiwiSaver providers recommend that you allow 10 -15 working days from when they receive a completed application.

My recommendation would be to contact your KiwiSaver provider even before you are in a contract to purchase a home and complete the KiwiSaver withdrawal via your solicitor as soon as you can after you are in a contract to purchase a property.

You are not able to withdraw your KiwiSaver funds after settlement has been completed.

Buyers need to work with their solicitor to complete the process of the KiwiSaver First Home Withdrawal.

The following is required:

1.       A copy of the signed sale and purchase agreement for the property that proves that you are the potential buyer of the property.

2.       Buyers need to complete a statutory declaration and would require a solicitor certificate. The buyer needs to make several declarations amongst other that the declaration is true and correct, and that the buyer meets the eligibility requirements for a First Home Withdrawal. The Statutory Declaration needs to be witnessed by a person under law, usually a Justice of the Peace or a lawyer.

3.       Solicitors undertaking signed by a solicitor or conveyancer, stating that the proceeds from the KiwiSaver First Home Withdrawal would be solely used towards the purchase price on settlement, or towards the deposit with any remaining balance then applied on settlement of the property.

 You may still be eligible to use your KiwiSaver funds even if you have owned a home before. This requires you to apply with Kāinga Ora under the Second Chance Category. Kāinga Ora will provide you with a letter confirming your eligibility to complete a KiwiSaver First Home Withdrawal if they deem that you are in the same position as a first home buyer. The letter is then included in your withdrawal application. The application forms will also contain a section where you select whether you are a first home buyer or a previous home buyer.

Conclusion

Being familiar with the rules and requirements around KiwiSaver First Home Withdrawals is essential for prospective first home buyers as it can reduce the added costs and stress which often arise on the purchase of your first home.

It is important that you as a first home buyer understand the process for withdrawal from your KiwiSaver investment, to ensure that you have access to the funds with the least amount of delay.