KiwiSaver: Can you be a second-time-around first-home buyer?
Most people know that you can withdraw money from your KiwiSaver account to help with a deposit on a first home, subject to meeting the membership and contribution criteria.
But while the rules are pretty clear that you can't tap into the scheme if you just want to move from an existing house to a new one, there are some circumstances in which you can use your KiwiSaver savings even if you've owned a house before.
Do you look like a first-home buyer?
You might be able to qualify for a First Home Withdrawal if you're in the same financial position as a first-home buyer and have not used your KiwiSaver funds to purchase a property before.
You pretty much have to look, at least on paper, like a first-home buyer.
There’s a limit on the value of assets you can have, which cannot be higher than 20 per cent of the regional house price cap. In the area you are buying. For example, the value of your assets (including a deposit for your house, your cars etc.) cannot be higher than $120,000 in Auckland or Queenstown Lakes.
Getting back on your feet
Often, this applies to people who've been through a relationship break-up and had to sell a property before they had built up much equity in it, or when someone has been forced to sell a home to clear debt.
You'll also need to meet all the rules that apply to other buyers using their KiwiSaver fund, such as an obligation to live in the property for at least six months after you purchase it and having been a member of KiwiSaver for at least three years.
Other assistance
You may also be able to qualify for a First Home Grant if your income is within the limits and the place you want to buy fits within house price caps. This can give you up to $10,000 if you’re buying a new-build property, depending on how long you have been contributing to KiwiSaver for. You may also be able to qualify for a First Home Loan, if you meet the criteria.
What can you withdraw?
You can apply to withdraw all your KiwiSaver savings to put towards a home or land, except for the $1000 kickstart, any amount you might have transferred from an Australian super scheme and any Government contributions you received during any period you lived overseas.
Is it the right move?
You'll need to determine whether using your KiwiSaver funds to get into a property is the right decision for you. While it reduces the amount that you need to save for a deposit, or the size of your mortgage when you buy a house, making a withdrawal does have an effect on the amount of money you'll have available to you at retirement.
Depending on at what age you're thinking about becoming a first-home buyer, getting back on track could be a little tougher. Whatever your circumstances, you’ll probably benefit from some independent financial advice to make sure your retirement planning is in order.
Like to chat?
Get in touch on 0800 000 518 or email broker@wellingtonmortgagebrokers.co.nz. We can help you work through what you might be entitled to and the implications of a KiwiSaver first-home withdrawal for your other short and long-term financial goals.