Kiwisaver for your first home purchase

Date: 14th August 2014


Using KiwiSaver as a means to buying a first home has become very popular over the last few years.  However, there is still a lack of knowledge as to how KiwiSaver can be used as a tool to help open the door to home ownership.  We recently spoke to Mortgage Advisor, Simon Maule of Loan Market and he filled us in on the details.

There are two key aspects to buying a home with KiwiSaver:

 1. Kiwisaver First Home Withdrawal

After 3 years of membership with a KiwiSaver scheme, members may be able to withdraw their contributions, employer contributions and all investment returns and put this towards their first home. The home can be of any value and this is not income tested.

 2. KiwiSaver  First Home Deposit Subsidy

In addition to the KiwiSaver First Home Withdrawal, first home buyers may also be eligible for the KiwiSaver First Home Deposit Subsidy. The deposit subsidy is a payment of $1,000 for each year of contribution towards KiwiSaver – you must have been contributing for 3 years, up to a maximum of $5,000 for 5 years. For this “free money” there is some criteria – the key points being  regional house price caps – eg in Christchurch the maximum purchase price is $400,000, for a single person the maximum income you can earn is $80,000 and a couple $120,000, you must have 10% deposit as a minimum (this can be made up of KiwiSaver and the deposit subsidy). The house must be being bought to be lived in by you.

An example

Consider a couple who have both been in KiwiSaver for 5 years and met the criteria for the KiwiSaver First Home Deposit Subsidy with, say, $14,000 each in their KiwiSaver schemes. So that’s $28,000, plus they qualify for $5,000 each from the deposit subsidy – that’s another $10,000.

All up they have $38,000 to put towards a house.  Say they see a house for $380,000, they therefore have 10% deposit which in many cases is all you need to buy your first home.

More about Kiwisaver:

Do you qualify for the Kiwisaver $521 annual Government contribution?

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