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First home purchase withdrawal & first home deposit subsidy

One of the benefit’s of KiwiSaver that often gets forgotten about is that it provides help to eligible members for purchasing their first home.
 
Since July 1 2010 KiwiSaver members have been able to apply to withdraw their own and their employers contributions to use towards a first home purchase.  This is known as first home purchase withdrawal.  Up to 31 March 2011, we have helped 29 people into their first home at an average of just under $14,000. That's nearly an additional 5% deposit on a house worth $300,000.
 
At the same time you may also be eligible for a first home deposit subsidy from the government.
 
Read a recent NZ Herald article on how KiwiSaver is helping people buy their first home.
 

First home purchase withdrawal

Who can apply for this?
The criteria to withdraw funds for first home purchase are:
  • You must be 18 years or over
  • Three or more years have passed since Inland Revenue received the first KiwiSaver contributions in respect of you (or since you first joined a KiwiSaver Scheme
  • You have never made a home purchase withdrawal
  • You intend that the relevant land will be your principal place of residence; and
  • You have never owned an estate in land (limited exceptions apply)
How do you apply for this?
 
Download and complete this form
 
If you have owned a property before and your financial position is considered the same as a first home buyer you may be able to apply to Housing New Zealand to be considered for a withdrawal as a ‘second chance’ home buyer.
 
How do you get the funds?
The funds will be transferred to your solicitor’s trust account prior to be settlement and will be paid to the vendor as part of the purchase price. If the agreement is not completed then your solicitor will pass the funds back to Fisher Funds to be reinvested in your KiwiSaver account.
 

First home deposit subsidy

A first home deposit subsidy of $1000 per year of contributions, up to a maximum of $5000, may be available to members who qualify for the first home purchase withdrawal. You can buy a property with other people in which case you may all qualify for a deposit subsidy. You may only receive the deposit subsidy once.
 
Who can apply for this?
To be eligible for the deposit subsidy, you must:
  • be 18 years or over 
  • not own any other property
  • have not received a deposit subsidy before  
  • have contributed at least the minimum percentage of your income to a KiwiSaver scheme, complying scheme or exempt employer scheme for at least three years (does not need to be consecutive).
  • have a combined yearly income of $100,000 or less (before tax) for one or two buyers 
  • have a combined yearly income of $140,000 or less (before tax) for three or more buyers 
  • buy a house within the maximum house price caps. The house price caps are $400,000 for Auckland City, North Shore City, Rodney District, Wellington City and Queenstown Lakes District and $300,000 for all other areas. Manukau City, Waitakere City, Franklin District and Papakura District are considered ‘other areas’. The new Auckland boundaries under the new Auckland council does not take effect until 1 November. The house price caps will be reviewed then.
  • you must live in the house, or apartment (if you don’t, you have to pay the deposit back) 
  • you cannot use the deposit subsidy to buy an investment property 
  • if you are buying land, a house must be built within 12 months of purchase. You will need to supply a code complance certificate to show that this has been done 
  • if you are building on land or buying an apartment that is being built, you must show: 
  • you will have funding for the construction of the building 
  • the total cost of both the land and the house or apartment is within the house price caps 
  • the land or site is ready to build on
How do you apply for this?
Housing New Zealand administers this subsidy and you can find out more details on the Housing New Zealand website. The Revenue Minister, Peter Dunne, has advised that any KiwiSaver members who qualify for the First home Deposit Subsidy will not be taxed on the subsidy.
 
Can I get the get the deposit subsidy without withdrawing my funds?
Yes. If you would like to leave your funds in KiwiSaver but want to apply for the deposit subsidy you can do that. You do not need to apply for both.