For many first-home buyers in New Zealand, KiwiSaver is the key that unlocks the door to homeownership. Since the scheme’s introduction, thousands of Kiwis have used it not just for retirement savings but as a powerful deposit-boosting tool to buy their first home.
The KiwiSaver First Home Withdrawal allows eligible buyers to use most of their KiwiSaver funds to help purchase a home to live in. Understanding the rules, timing, and process is crucial. If used correctly, it can significantly speed up your journey to owning a home.
At Luminate, we work with first-home buyers every day to help them make the most of their KiwiSaver and get into a home sooner. This guide walks you through everything you need to know about the withdrawal process, eligibility, and what to watch out for.
What is the KiwiSaver First Home Withdrawal?
The First Home Withdrawal allows KiwiSaver members to withdraw nearly all their KiwiSaver balance to put toward buying a home they intend to live in. It can be used for your deposit, for settlement funds, or a combination of both depending on how your purchase is structured.
Importantly, the withdrawal is only available once and cannot be used to buy an investment property.
Who Can Use It?
To qualify, you must have been a KiwiSaver member for at least three years and be buying your first home. You must intend to live in the property for at least six months following the purchase.
Even if you’ve owned property in the past, you may still be eligible if Kāinga Ora determines that you're in a similar financial position to a first-home buyer. This is referred to as the "second-chance" provision and requires an application to Kāinga Ora for approval.
How Much Can You Withdraw?
You can withdraw everything in your KiwiSaver account except for the $1,000 government kick-start (if you received it when you joined) and any funds specifically locked in. This means you can usually access your own contributions, your employer's contributions, most government contributions, and investment earnings.
Many buyers are able to withdraw between $20,000 and $60,000 depending on how long they have been contributing and at what level. This can make a significant difference to your deposit and borrowing power.
Using KiwiSaver as a Deposit
Yes, you can use your KiwiSaver funds as part of your deposit. However, it’s essential to check with your lender and solicitor early in the process because each one handles KiwiSaver differently.
Some banks allow you to use KiwiSaver funds as part of the initial deposit when going unconditional. Others prefer the withdrawal to be applied at settlement. Either way, the money is not paid directly to you. It must go to your solicitor’s trust account and be used for the home purchase.
If you plan to buy at auction, timing becomes more complex. You may need to pre-approve your KiwiSaver withdrawal or have alternate deposit funds ready while the withdrawal is processed for settlement.
How to Apply
Start by contacting your KiwiSaver provider and requesting their First Home Withdrawal form. Processing times vary, but most providers require at least 10 business days to release the funds. If you’re working with a tight deadline, apply as early as possible.
You’ll also need a solicitor or conveyancer to assist. They must confirm that the property is being bought for your own use and handle the transfer of funds into their trust account. Your completed application will usually include a copy of the signed Sale and Purchase Agreement, proof of ID, your IRD number, and any declarations required by your provider.
Once your application is approved, your KiwiSaver provider will pay the funds directly to your solicitor, ready for settlement or deposit depending on the timing.
Can You Combine KiwiSaver With the First Home Loan?
Yes, and many buyers do. The KiwiSaver First Home Withdrawal and the Kāinga Ora First Home Loan are two separate schemes, but they can work together.
The First Home Loan is a standard home loan offered by selected lenders to eligible applicants and underwritten by Kāinga Ora. The government acts as a guarantor for the loan, making it possible for the lender to accept a lower deposit than usual.
Both schemes require separate applications and timelines, so plan ahead and get help if you’re unsure.
Common Mistakes and What to Watch For
One of the most common mistakes is leaving the withdrawal application too late. KiwiSaver funds can’t be accessed instantly. If you don’t submit your paperwork in time, your property settlement could be delayed.
It’s also important to understand that you can only use the withdrawal once, and only if you intend to live in the home. If you move out or rent the property shortly after buying, you may be in breach of the terms.
Make sure your expectations are clear, and don’t assume all banks or KiwiSaver providers treat the process the same way. Some are faster and more flexible than others. Working with a mortgage adviser can save you time and stress.
What If You’ve Owned a Home Before?
You might still qualify if you’re in a similar financial position to someone who has never owned a home. Kāinga Ora assesses these situations and can issue a letter confirming your eligibility to withdraw your KiwiSaver for a second-chance home purchase.
The process involves disclosing your assets, liabilities, and income. If Kāinga Ora agrees that you do not have significant assets or resources, they may allow the withdrawal even though you’ve owned before.
Final Thoughts
The KiwiSaver First Home Withdrawal is one of the most useful financial tools available to first-home buyers in New Zealand. It can significantly boost your deposit and improve your chances of getting mortgage approval.
The key is planning. Understand the rules, talk to your KiwiSaver provider and solicitor early, and give yourself enough time to meet all the conditions.
At Luminate, we help first-home buyers make the most of their KiwiSaver, avoid delays, and build a full funding strategy to buy with confidence.
Ready to use your KiwiSaver for your first home?
Book a free First-Home Strategy Session with Luminate.
We’ll help you understand what you can withdraw, guide you through the paperwork, and work alongside your solicitor and lender to make the process seamless.
Visit www.luminate.co.nz | Email askus@luminate.co.nz | Call 0800 333 400
