KiwiSaver First Home Withdrawal: Eligibility and Process
For many Kiwis, purchasing a first home is a significant milestone, and KiwiSaver has become a vital tool in achieving this goal. The KiwiSaver First Home Withdrawal scheme allows eligible members to use their savings to help fund the purchase of their first home. Understanding the eligibility criteria and the withdrawal process is essential for anyone considering this option. Here’s what you need to know.
Eligibility Criteria
To be eligible for a KiwiSaver first home withdrawal, you must meet several criteria:
- Membership Duration: You must have been a member of KiwiSaver or a complying superannuation fund for at least three years.
- First-Time Buyer: You should be purchasing your first home. However, if you have previously owned a home, you may still qualify if Kāinga Ora determines that you are in a similar financial position to a first-time buyer.
- Property Location and Type: The property must be located within the country, and you must intend to live in it. Eligible property types include fee simple, stratum estate, cross-lease, leasehold, and Māori land.
- Intention to Reside: You must plan to live in the home or build a home on the land you are purchasing. The withdrawal cannot be used for investment properties or to build on land you already own.
What You Can Withdraw
Eligible members can withdraw most of their KiwiSaver savings, including personal contributions, employer contributions, government member tax credits, and investment returns. However, at least $1,000 must remain in your KiwiSaver account. Additionally, funds transferred from an Australian superannuation scheme are not eligible for withdrawal.
Application Process
The application process for a KiwiSaver first home withdrawal involves several steps:
- Gather Documentation: Collect necessary documents, including certified identification, proof of address, a bank deposit slip for your solicitor’s trust account, and a copy of the sale and purchase agreement. You will also need a letter of undertaking from your solicitor.
- Submit Application: Complete the KiwiSaver withdrawal form provided by your scheme provider. This form includes a statutory declaration, which must be witnessed by an authorised person such as a Justice of the Peace or a lawyer.
- Provider Assessment: Submit the application form and supporting documents to your KiwiSaver provider. It is advisable to confirm receipt and processing with your provider, as the process can take several days.
- Fund Transfer: Once approved, the funds will be transferred to your solicitor’s trust account to assist with the property purchase. It is crucial to apply well in advance of the settlement date, as withdrawals cannot be made after the purchase has settled.
Additional Considerations
- Previous Homeowners: If you have previously owned a home, you must apply to Kāinga Ora for a determination of eligibility. This process can take at least 20 working days, so it is important to start early.
- Fund Choice: Before making a withdrawal, consider reviewing your KiwiSaver fund choice to ensure it aligns with your home-buying timeline and risk tolerance.
The KiwiSaver First Home Withdrawal scheme offers a valuable opportunity for first-time home buyers to leverage their savings towards purchasing a home. By understanding the eligibility criteria and following the application process carefully, you can make informed decisions and navigate the process smoothly. Engaging with your KiwiSaver provider and Kāinga Ora early in your home-buying journey can help ensure that you maximise the benefits of this scheme and achieve your homeownership goals.