Buying your First Home with KiwiSaver

A KiwiSaver first home withdrawal is a great way to boost your budget and get on the property ladder sooner. It’s a simple process, but there are a few things you need to know before you start hunting for property.

In this KiwiSaver first home withdrawal guide we’ll cover:

• What can you withdraw?
• Eligibility rules for KiwiSaver first home withdrawal.
• How the KiwiSaver first home withdrawal process works.
• Everything you need to know about Second Chance KiwiSaver withdrawal.
• How to use KiwiSaver first home withdrawal as your deposit.
• KiwiSaver first home withdrawal FAQs.

You can withdraw almost everything in your account to put toward your home. The only bits that must stay behind are:

• You must always leave $1,000 in your KiwiSaver account.
• Any funds transferred from an Australian Complying Superannuation scheme.
• Government contributions received while you were living overseas.

Generally, you can apply for a withdrawal if:

• You’ve been a KiwiSaver member for at least three years.
• This is your first time owning property in NZ or overseas (Second chance KiwiSaver withdrawal may apply, see more below)
• The property or land is in New Zealand, and you intend to live in it for at least six months.
• You are buying fee simple, stratum estate, cross-lease, leasehold, or Māori land
• Note for land buyers: You can use your withdrawal for the land purchase, but not for the subsequent build costs.

If you meet all of the above criteria, but you’ve owned property in NZ or overseas in the past, you may still be able to withdraw from your KiwiSaver to buy property, under what’s called ‘Second Chance KiwiSaver’ rules.

To qualify, your realisable assets (like cash, investments, boats or caravans over $5,000) must be worth less than 20% of the house price cap for an existing property in the area you’re buying. You must also no longer own any interest in property (not including Māori land), and you must not have previously withdrawn your KiwiSaver balance to buy a home.

For example: let’s say Joe Bloggs bought a home in a prior relationship then sold it when they broke up. Joe didn’t use his KiwiSaver the first time around, and his assets are under the house price cap. Joe should be ok to withdraw his KiwiSaver.

*Realisable assets include: cash or money in bank accounts, shares, stocks, bonds, investments, any money held by a real estate agent or solicitor as a house deposit, boats and caravans over $5,000, additional vehicles not used as your usual method of transport, and other individual assets worth over $5,000. *See house price caps by region at the bottom of this article.

If this sounds like you, your first step is to apply to Kāinga Ora for an eligibility letter before approaching your KiwiSaver provider.

1. Gather supporting documents

You’ll need a certified ID, proof of address, a bank deposit slip for your solicitor’s trust account, and a copy of the sale and purchase agreement for the property you’re buying.

2. Download and fill out a KiwiSaver withdrawal form from your provider

Head to your provider’s website, download a KiwiSaver withdrawal application and fill it out.

Here’s Kernel’s KiwiSaver first home withdrawal form

3. Complete a statutory declaration

You’ll need to fill out and sign a statutory declaration confirming that for the length of your KiwiSaver your main place of residence was New Zealand, and verify an NZ passport or driver’s license. A lawyer, JP, or other person authorised to take statutory declarations will need to witness this (usually the lawyer you’re working with to buy your first home).

4. Ensure you have all the additional documents to send in

Send the KiwiSaver withdrawal form to your provider along with your supporting documents and an undertaking from your solicitor confirming the sale and purchase agreement is conditional or unconditional. Now it’s time to play the waiting game - most providers say they’ll take 8-15 days to approve applications and transfer the funds to your solicitor’s trust account.

If you’ve owned a home before you may be able to buy a home using your KiwiSaver, but the process is a little different:

1. First you’ll need to check if you’re eligible under the below criteria:

• You have never withdrawn your KiwiSaver before to buy a home.
• You have owned a home before, but no longer have any interest in property (except Māori land).
• You have been a member of KiwiSaver for at least three years.
• You meet realisable asset caps - read more about asset caps.

2. Next you’ll need to apply via Kāinga Ora’s website here.

If you’re eligible, then you will receive a certificate confirming that you are in the same position as a first home buyer.

3. Once you’re approved, you’ll need to go through the usual KiwiSaver first home withdrawal application process (see above) and supply your provider with the certificate of approval from Kāinga Ora.

A common question is whether you can use your KiwiSaver funds for the initial deposit when you sign a Sale and Purchase agreement, rather than waiting until the final settlement day. The answer is yes - but there are some specific rules to keep in mind.

• Conditional offers: You can generally use your KiwiSaver as a deposit if you are making a conditional offer.
• Auctions and unconditional offers: Because auctions require an immediate deposit on the day, you typically cannot use your KiwiSaver funds for these. You’ll need to have those funds available in cash.

If you’re using your KiwiSaver for the deposit, the funds are paid directly to the vendor’s solicitor’s trust account once the agreement becomes unconditional. They will then hold these funds until the final settlement date.

To protect your savings, the solicitor receiving the funds must provide an undertaking (a formal promise) that if the settlement doesn't proceed for any reason, the KiwiSaver funds will be returned to your provider.

Standard agreements often state that the deposit must be paid to the real estate agent. However, KiwiSaver rules require the funds to be held by a solicitor.

As soon as you’re interested in a property, let your lawyer and the real estate agent know you plan to use your KiwiSaver for the deposit. They can then update the agreement to ensure the deposit is paid to the vendor’s solicitor instead of the agency. This small bit of admin early on ensures everything runs smoothly when it’s time to pay.

It’s a smart move to get pre-approval from your provider as soon as you start house hunting. This confirms exactly how much you’ll have available for your budget.

Once you’ve signed a Sale and Purchase agreement, you should submit your formal application right away. While the process usually takes 8–15 working days, we recommend allowing at least six weeks before your settlement date to be safe. If you’re using your funds for the initial deposit, remember to have your lawyer update the agreement to allow for the withdrawal timeframe.

Yes, if you’re buying with another person and you both meet the eligibility criteria, you can both withdraw your respective balances to put toward the same home.

No. The rules require that you intend to live in the property for at least six months. While you can certainly rent out a spare room while you’re living there, you cannot rent out the entire property immediately.

If your circumstances change within those first six months, it’s best to speak with your lawyer to ensure you’re still meeting your obligations.

If the funds aren't transferred before the settlement date, they cannot be used for the purchase at all. If you’re using your KiwiSaver for the deposit and there’s a delay, your lawyer may be able to negotiate an extension to the unconditional date, but this depends on the vendor’s agreement. This is why we emphasise starting the paperwork as early as possible.

If you’re planning to buy within the next year or two, it’s worth considering a shift to a fund primarily made up of income assets, such as the Kernel Cash Plus fund or Conservative fund. Growth funds, like the Kernel High Growth fund, are designed for the longer term and can be volatile and a market dip right before you buy could unexpectedly shrink your deposit. Moving to a lower-risk fund can help protect the house deposit you’ve worked so hard to build.

Read more about investment horizons

Kernel Wealth Limited is the manager and issuer of the Kernel KiwiSaver Plan and Kernel Funds Scheme. A Product Disclosure Statement is available at Kernel Wealth | Resources & Documents. Investing involves risk including the possible loss of principal and there is no assurance that the investment will provide positive performance over any period of time. The information provided should not be relied upon as investment advice or recommendations and should not be considered specific legal, investment or tax advice.