To use or not to use your Kiwisaver or qualifying superannuation funds…..that is the question.
A number of first home buyers are currently in the position of trying to find out if they can buy a home and are considering whether they can use, or will use their Kiwisaver.
Kiwisaver is intended for retirement, not for use right now, however I am working with a number of people who are buying their first home and are most definitely using their Kiwsaver as a deposit.
If you think you might want to use your Kiwisaver then your Kiwisaver provider is the first port of call. They will advise you
- whether you should use it for this purpose
- if you meet the withdrawal criteria, such as, have you been a member and contributing for 3 years and
- how much you might be able to use: as an example – all yours and your employers contribution. FYI: you will be expected to leave $1,000 in the fund.
There is a second part to Kiwisaver called the Homestart Grant which is administrated by the IRD. This gives you the opportunity to increase your deposit funds by up to $5,000 for an existing property and $10,000 for a new property. There is criteria that you will need to meet:
1. You have been a member and contributing to Kiwisaver for 3 years
2. You current income meets income caps: individual $85k, couple $130k, and regional house price caps
If you don’t have any other savings or help from a family member then Kiwisaver might be your only option for a deposit on a home. You are only a first home buyer once, so if you buy a house then decide you want to buy another one and didn’t use your Kiwisaver then it wont be an option. There are of course exceptions to this rule, such as, if the property hasn’t been owned in your own name or you qualify for a second chance option. As an example, the people who have left earthquake damaged properties in areas like Christchurch fall into that category.
Note: Kiwisaver and Homestart Grant qualifying criteria is subject to changes so do your homework with your Kiwisaver provider and check out the following link for details about the Homestart Grant: