Investing In Real Estate With Your KiwiSaver

Did you know you may be able to withdraw some of your KiwiSaver savings (provided you leave a minimum balance of $1,000 in your account) to put towards purchasing your first home?

Making a first-home withdrawal

You must have been a KiwiSaver member for three or more years. You can only withdraw money to purchase your first home – not an investment property.

If you have owned a home before, in some circumstances you may still be eligible to withdraw your savings. Your scheme provider may require you to contact Housing New Zealand to determine if you’re in the same financial position as a first home buyer.

What can be withdrawn?

If you’re eligible, you may be able to withdraw some or all of your KiwiSaver savings to put towards purchasing your home.

Effective 1 April 2015 and onwards your KiwiSaver withdrawal may include:

• your members contributions
• any employer contributions (voluntary and compulsory)
• any returns on investment(s) received
• any member tax credits

To find out more, visit http://kiwisaver.govt.nz

KiwiSaver HomeStart grant

After 3 years of contributing to KiwiSaver, you may be entitled to a KiwiSaver HomeStart grant. The grants are administered by Housing New Zealand and will be paid to your solicitor.

What the grants are worth

The two HomeStart grants are:

• For purchasing an existing home, the grant is between $3,000 and $5,000 based on $1,000 each year of KiwiSaver membership.
• For building or purchasing a new home, or for purchasing land to build a new home on, the grant is, in effect doubled to, $2,000 per year of membership in the scheme, up to a maximum of $10,000 for five years for each member.

There are maximum values of grants payable for the purchase of a single dwelling, regardless of the number of eligible purchasers:

• $10,000 for the purchase of an older/existing property
• $20,000 for the purchase of a new property.

Getting a KiwiSaver HomeStart grant

To be eligible for a KiwiSaver HomeStart grant you must:

• have been contributing the required minimum amount to KiwiSaver for at least three years
• be 18 years or over
• be purchasing or building your first home (see “Note” below)
• have a household income (before tax) of less than $85,000 per year (for one person), or less than $130,000 per year (for two or more people)
• have a deposit that is 10% or more of the purchase price, including the addition of the grant
• be planning to live in the house for at least 6 months from the settlement/completion of the property.

Income and house price caps will apply.

To find out more, visit the Housing New Zealand website or call them on 0508 935 266.