How to use KiwiSaver for your first home
So you’re thinking of buying your first home—neat! Let’s go over some things you should know about using your KiwiSaver balance for a first home, how you can prepare for the withdrawal, and how to withdraw your balance from the Sharesies KiwiSaver Scheme.
First—some basics to know
Eligibility for a first-home withdrawal
You’re eligible to make a first-home withdrawal from your KiwiSaver balance if you:
have been a member of a KiwiSaver scheme for three years or more
haven't previously used your KiwiSaver balance to buy a house or land
haven’t owned a property before (or you’re eligible as a previous homeowner)
are buying the home as your primary place to live (not an investment property)
are buying a home or land that’s in New Zealand.
How much of your balance you can withdraw
If you meet the eligibility criteria, you can withdraw some or all of your KiwiSaver balance for a first-home withdrawal, except for:
any amount that’s been transferred from an Australian superannuation fund (this needs to stay in your KiwiSaver account until retirement)
any Government contributions received during any period you lived overseas and didn’t have permanent residence in New Zealand.
Timing your withdrawal correctly
Sometimes, you can choose to use your first-home withdrawal for your ‘deposit’ or for the ‘settlement amount’.
The deposit is paid to your real estate agent and is usually due on the day you need to have met all the conditions of your sale and purchase agreement (the ‘unconditional date’). The settlement amount is paid to the seller of the property (well, their lawyer), and is due on the day you become the legal owner of the property (the ‘settlement day’).
It’s important you decide which one you’re going to use your withdrawal for before you submit your first-home withdrawal application, as the money must be in your lawyer's trust account by the right deadline. But you’re not in this alone—your lawyer will help you get sorted on time!
Note that if you’re buying a property through an auction, you can’t use your withdrawal for the deposit—you can only put it towards the settlement amount.
How to prepare for your withdrawal
12+ months out
As soon as you know you want to put your KiwiSaver balance towards a first home, it’s worth setting a goal for the amount of money you want to withdraw. Usually, you’ll need to pay around 20% of the property’s purchase price as a deposit (which can be made up of your KiwiSaver withdrawal, a loan from the bank, your own savings, and so on). So think about how much you’ll spend on a property, then work out a KiwiSaver withdrawal amount that’s achievable for you.
Once you have your goal number, add a buffer to account for market volatility. You don’t want to rely on share markets being favourable at the time of your withdrawal for you to be able to meet your goal amount.
Now you have your goal withdrawal amount, check in with your current KiwiSaver investment plan and make sure it’s set up in a way that makes sense for your situation. For example, if your KiwiSaver balance is invested in high-risk investments (like in a ‘growth’ fund), you might consider shifting some (if your scheme allows it) or all of the money into lower-risk investments (like a ‘conservative’ fund). Low-risk investments are less likely to fluctuate in value, meaning you can have more certainty of the amount you’ll be able to withdraw for your first home.
6–12 months out
Around this time, it’s good to check back in with your KiwiSaver balance to see if you’re on track for meeting your withdrawal goal. If you haven’t already moved your balance to a low-risk fund, you could consider doing this now to manage the risk of your withdrawal amount fluctuating in value.
6–12 months before your withdrawal is also a good time to check if you qualify for a First Home Grant of up to $10,000. If you meet the criteria, Kāinga Ora recommends applying for this grant around the time you start looking at properties so that you know how much you may qualify for. Pre-approval for a First Home Grant lasts for six months—you’ll need to reapply for the grant if you don’t buy a property within that time.
90+ days out
The countdown’s on! Time to get everything ready so you’re in a position to make an offer on a property.
Before you contact your bank about a home loan, reach out to your KiwiSaver provider to get an estimate of how much you have available to withdraw. You’ll need to include this estimate when you apply for a conditional home loan approval, which is an agreement from your bank to lend you a certain amount of money for a property. Conditional approval generally lasts for 90 days but can be extended for another 90 days if your finances don’t change.
Next, it’s worth getting in touch with a lawyer so you can talk through the buying process and get a head start on any additional forms you’ll need to buy a property.
How to make a first-home withdrawal from Sharesies
Get an estimate and confirm you’re eligible
Email us at firstname.lastname@example.org to request a document that confirms you’re eligible to withdraw your balance for a first home. This document also includes an estimate of the amount you have available to withdraw. Note that this is not a guarantee of how much you’ll get if your withdrawal is approved—your KiwiSaver balance can still fluctuate due to things like market conditions or if you receive more contributions.
Fill out a first-home withdrawal form
It takes time to gather everything you need for a withdrawal application, so it’s worth requesting a withdrawal form from us (by emailing email@example.com) as soon as you know you want to put in an offer on a property.
To complete the form, you need:
your IRD number
the details of your lawyer’s trust account
an authorised person (like a Justice of the Peace or a registered lawyer) to witness you signing the statutory declaration included in the form.
You may also need:
an eligibility letter from Kāinga Ora if you’re applying as a previous homeowner
a lease, occupation licence, or occupation order if you’re buying or building on Māori land
dates of any period you lived overseas and didn’t have permanent residence in New Zealand.
Then, your lawyer will need to send us your signed form along with:
a bank deposit slip for their trust account
a copy of the sale and purchase agreement for the property you’re buying, showing you as the purchaser (or a completed Deed of Nomination if your name isn’t on the sale and agreement)
the letter of undertaking—completed by them.
Submit your withdrawal form
If you’re using your withdrawal for a deposit, you should submit your withdrawal application form as soon as you have a conditional sale and purchase agreement. Keep in mind that it can take 10–15 business days to process your application and get the money to you.
Otherwise, if you’re putting your withdrawal toward the settlement amount, submit your application at least 10–15 days before settlement is due.
Once we receive your application, we’ll make sure you’ve provided all the right documents (and we’ll let you know if anything’s missing). Then we’ll process your application and email the outcome to you and your lawyer. If your application is approved, the money will be sent to your lawyer’s trust account.
What happens after your withdrawal
If your property purchase falls through, don’t worry—you won’t lose your KiwiSaver savings or your opportunity to make a first-home withdrawal in the future. Your lawyer will pay the withdrawal amount back to your KiwiSaver provider. If you’re a member of the Sharesies KiwiSaver Scheme, we’ll invest the money according to your KiwiSaver investment plan.
If all goes well, nice—you’re a homeowner! And it’s time to start thinking about retirement. 👵
Ok, now for the legal bit
Investing involves risk. You aren’t guaranteed to make money, and you might lose the money you start with. We don’t provide personalised advice or recommendations. Any information we provide is general only and current at the time written. You should consider seeking independent legal, financial, taxation or other advice when considering whether an investment is appropriate for your objectives, financial situation or needs.