Positive 'tweaks' to KiwiSaver 'second chance' first home buyer rules

A unique feature of NZ's Retirement savings scheme KiwiSaver is that KiwiSaver members can withdraw their funds to put towards the purchase of their first home.  If this is your first home, then the process is quite straightforward, with some additional features if you are building a home.  

However, the rules also allow for 'second chance' house purchasers to access their KiwiSaver funds towards a house purchase.  The rules have not been straightforward, but they are changing significantly on the 1st July 2016.

NOTE: changes are coming to the rules on 1st July 2016:

From 1 July 2016, the KiwiSaver legislation is being changed to allow a greater number of KiwiSaver members to be able to withdraw their funds in order to help them buy a home. The legislation change sees the income cap for previous home owners lifted, potentially enabling more members the chance to access the KiwiSaver funds.

All previous home owners who no longer have an interest in property and who want to withdraw their KiwiSaver funds under the KiwiSaver first-home withdrawal will no longer need to meet the set income caps of  under $80,000pa (for solo purchasers) or $120,000pa (for two or more purchasers) to help purchase a home. However, these previous home owners will still need to meet the test of having realisable assets of no more than 20% of the regional house price for their area.

Please note: Any applications received prior to the launch date of 1 July 2016 will be assessed under the current rules. Only applications received on or after 1 July 2016 will be assessed under the new rules.

The official Housing New Zealand website states that for 'KiwiSaver first-home withdrawal for previous house owners' this is the eligibility checklist: (FROM 1st JULY 2016)

Run through the checklist below to see if you qualify:

  • I have not received the first-home withdrawal before.
  • I have been a member of KiwiSaver for at least three years.
  • I have previously owned a home, but no longer have an interest/share in a property.
  • I do not have realisable assets totalling more than 20 percent of the house price cap for the area I am buying in. Realisable assets are belongings that you can sell to help buy a home. Housing New Zealand considers the following to be realisable assets:
    • Money in bank accounts (including fixed and term deposits)
    • shares, stocks and bonds
    • investments in banks or financial institutions
    • any money paid to, or held by, the real estate agent or solicitor as a deposit on a home
    • boat or caravan (if the value is over $5,000)
    • other vehicles (such as classic motorbikes or cars – not being used as your usual method of transport)
    • other assets valued over $5,000.

Ensure that you understand how these rules affect you and whether you are eligible before you make any commitments.

For more information, here are some NZ Herald articles and commentaries on the topic:

KiwiSaver: 'Second chance' home rules tough [NZ Herald]

This website is operated by Moneyworks NZ Ltd and is not endorsed by, or affiliated with, the New Zealand government or Inland Revenue. Moneyworks NZ Ltd is using the KiwiSaver trade mark and logo under licence from Inland Revenue. To view the official New Zealand government KiwiSaver website, please click Here

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