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 comprehensive guide walks you through everything you need to know about the withdrawal process, eligibility requirements, and what to watch out for.
What is the KiwiSaver First Home Withdrawal?
The KiwiSaver First Home Withdrawal is a government scheme that allows eligible 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 per person and cannot be used to buy an investment property. The property must be your primary residence.
Key Benefits of Using Your KiwiSaver
- Boost your deposit: Access tens of thousands of dollars to increase your deposit size
- Improve borrowing power: A larger deposit means you may need to borrow less
- Speed up homeownership: Reach your deposit goal months or years faster
- Combine with other schemes: Use alongside the First Home Loan for maximum benefit
KiwiSaver First Home Withdrawal Eligibility Requirements
To qualify for the KiwiSaver First Home Withdrawal, you must meet specific criteria set by the government and your KiwiSaver provider.
Primary Eligibility Criteria
| Requirement | Details |
|---|---|
| Membership Duration | Must have been a KiwiSaver member for at least 3 years |
| First Home Status | Buying your first home, or approved as "second chance" buyer |
| Intended Use | Property must be your primary residence |
| Occupancy Requirement | Must live in the property for at least 6 months after purchase |
| Property Location | Property must be in New Zealand |
Who Qualifies as a First-Home Buyer?
You're considered a first-home buyer if you have never owned a home in New Zealand or anywhere else in the world. This includes:
- Property owned solely by you
- Property owned jointly with others
- Property owned through a trust or company where you have an interest
Second-Chance Eligibility: Can You Qualify If You've Owned Before?
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.
To qualify for second-chance eligibility, you must apply to Kāinga Ora and demonstrate that:
- You do not currently own property
- You do not have significant assets or resources
- Your financial position is comparable to someone who has never owned a home
The process involves disclosing your assets, liabilities, and income. If Kāinga Ora agrees that you meet the criteria, they will issue a letter confirming your eligibility to withdraw your KiwiSaver for a second-chance home purchase.
How Much Can You Withdraw From Your KiwiSaver?
You can withdraw almost your entire KiwiSaver balance, with only a few exceptions.
What You Can Withdraw
| Contribution Type | Can Withdraw? |
|---|---|
| Your contributions | ✓ Yes |
| Employer contributions | ✓ Yes |
| Government contributions | ✓ Yes (except kick-start) |
| Investment returns | ✓ Yes |
| Government kick-start | ✗ No - must leave $1,000 |
| Locked-in funds | ✗ No (varies by provider) |
Typical Withdrawal Amounts
Many buyers are able to withdraw between $20,000 and $60,000 depending on how long they have been contributing and at what contribution level. Some buyers with longer membership periods or higher contribution rates may withdraw even more.
Example scenarios:
- 5 years contributing at 3% on a $60,000 salary: Approximately $25,000-$30,000
- 10 years contributing at 4% on a $70,000 salary: Approximately $50,000-$65,000
- 7 years contributing at 6% on a $80,000 salary: Approximately $45,000-$55,000
Note: These are estimates. Actual amounts depend on salary history, employer contributions, government contributions, and investment performance.
How to Apply for Your KiwiSaver First Home Withdrawal: Step-by-Step Guide
Applying for your KiwiSaver First Home Withdrawal requires careful planning and coordination with multiple parties. Here's exactly what you need to do.
Step 1: Check Your Eligibility (2-4 weeks before offer)
Before making an offer on a property, confirm your eligibility:
- Contact your KiwiSaver provider to check your balance
- Confirm you meet the 3-year membership requirement
- If you've owned property before, apply to Kāinga Ora for second-chance approval
- Get an indication of how much you can withdraw
Step 2: Engage a Solicitor or Conveyancer (Before making an offer)
You'll need a solicitor or conveyancer to handle your property purchase. They must:
- Confirm the property is being bought for your own use
- Handle the transfer of KiwiSaver funds into their trust account
- Complete required declarations for your KiwiSaver provider
Choose your legal representative early, as they'll need to be named on your withdrawal application.
Step 3: Make Your Offer and Sign the Sale and Purchase Agreement
Once you've found your property and your offer is accepted, you'll sign a Sale and Purchase Agreement. You'll need a copy of this for your KiwiSaver application.
Important timing consideration: If buying at auction, you may need to pre-approve your withdrawal or have alternate deposit funds ready, as the standard application timeline may not align with auction settlement dates.
Step 4: Complete Your KiwiSaver First Home Withdrawal Application
Contact your KiwiSaver provider and request their official First Home Withdrawal form. You'll typically need to provide:
- Completed application form
- Copy of the signed Sale and Purchase Agreement
- Proof of identification (driver's license or passport)
- IRD number
- Solicitor's trust account details
- Any additional declarations required by your provider
Step 5: Submit Your Application (At least 10 business days before funds needed)
Processing times vary by provider, but most require at least 10 business days to release the funds. Some providers may take up to 20 business days. If you're working with a tight deadline, apply as early as possible after signing your Sale and Purchase Agreement.
Step 6: Funds Released to Your Solicitor
Once approved, your KiwiSaver provider will pay the funds directly to your solicitor's trust account. The money will never come directly to you. Your solicitor will then use these funds for either:
- Part of your deposit when going unconditional, or
- Settlement costs when the property officially becomes yours
Timeline Overview
| Stage | Timeframe |
|---|---|
| Eligibility check | 2-4 weeks before making offer |
| Engage solicitor | Before making offer |
| Sign Sale & Purchase Agreement | When offer accepted |
| Submit KiwiSaver application | Within 1-3 days of signing |
| Processing time | 10-20 business days |
| Funds released | Before settlement date |
Using Your KiwiSaver as a Deposit
One of the most common questions first-home buyers ask is whether they can use their KiwiSaver funds as part of their initial deposit. The answer is yes, but the timing and process vary by lender.
How Different Banks Handle KiwiSaver Deposits
Banks have different policies on when and how you can use your KiwiSaver funds:
Option 1: Deposit when going unconditional Some banks allow you to use KiwiSaver funds as part of the deposit when your offer becomes unconditional. This typically requires pre-approval of your withdrawal and coordination between your bank, solicitor, and KiwiSaver provider.
Option 2: Applied at settlement Other banks prefer the KiwiSaver withdrawal to be applied at settlement rather than as an initial deposit. In this case, you'll need alternative funds for the deposit, and your KiwiSaver money will be used to complete the purchase.
Best Practice Tips
- Check with your lender early: Confirm their specific requirements before making an offer
- Coordinate with your solicitor: Ensure they understand the lender's expectations
- Have a backup plan: Consider having some cash savings alongside KiwiSaver
- Allow extra time: KiwiSaver processing can't be rushed, so plan accordingly
Buying at Auction: Special Considerations
Auction purchases require immediate deposits, which creates unique challenges for using KiwiSaver funds:
- Standard KiwiSaver withdrawal timeframes may not align with auction deposit requirements
- You may need to pre-approve your withdrawal before auction day
- Alternative deposit funds may be required while the withdrawal processes
- Some buyers use bridging finance or family assistance for the deposit, then repay these funds at settlement when KiwiSaver money arrives
Luminate tip: If you're planning to buy at auction, speak with a mortgage adviser at least 4-6 weeks beforehand to structure your deposit strategy properly.
Combining KiwiSaver With the First Home Loan
Many first-home buyers use both the KiwiSaver First Home Withdrawal and the Kāinga Ora First Home Loan together. These are two separate schemes that complement each other perfectly.
What is the First Home Loan?
The First Home Loan (previously called Welcome 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.
Key Differences Between the Two Schemes
| Feature | KiwiSaver First Home Withdrawal | First Home Loan |
|---|---|---|
| What it is | Withdrawal of your savings | Government-backed mortgage |
| Purpose | Provides deposit funds | Provides the loan itself |
| Deposit requirement | N/A | As low as 5% deposit |
| Eligibility | 3 years KiwiSaver membership | Income and price caps apply |
| Can combine? | ✓ Yes | ✓ Yes |
How They Work Together
Using both schemes allows you to:
- Withdraw your KiwiSaver to boost your deposit to 5-10%
- Apply for a First Home Loan which accepts this lower deposit with government backing
- Avoid Lenders Mortgage Insurance (LMI) that would typically apply to low-deposit loans
Both schemes require separate applications and different timelines, so planning ahead is essential. Working with a mortgage adviser can help you navigate both processes simultaneously.
Common Mistakes to Avoid
Learning from others' mistakes can save you time, money, and stress. Here are the most common pitfalls first-home buyers encounter when using their KiwiSaver.
Mistake 1: Applying Too Late
The problem: KiwiSaver funds can't be accessed instantly. Most providers need 10-20 business days to process applications.
The solution: Submit your application within 1-3 days of signing your Sale and Purchase Agreement. If you have a short settlement period, notify your provider immediately.
Mistake 2: Not Checking Your Balance Early
The problem: Some buyers assume they have more in KiwiSaver than they actually do, leading to deposit shortfalls.
The solution: Check your exact balance 2-3 months before you start house hunting. This gives you time to adjust your deposit strategy if needed.
Mistake 3: Assuming All Providers Are the Same
The problem: Different KiwiSaver providers have different processing times, requirements, and customer service standards.
The solution: Research your provider's specific withdrawal process. If you're unhappy with their service or speed, consider switching providers well before you need to access your funds.
Mistake 4: Not Understanding the Occupancy Requirement
The problem: The withdrawal is only valid if you intend to live in the home for at least 6 months. Some buyers don't realize this and plan to rent it out immediately.
The solution: Only use the withdrawal if you genuinely plan to live in the property. If you move out or rent the property shortly after buying, you may be in breach of the terms.
Mistake 5: Going to Auction Without a Plan
The problem: Auction deposits are due immediately, but KiwiSaver withdrawals take weeks to process.
The solution: Arrange alternative deposit funds (savings, family assistance, or bridging finance) or pre-approve your KiwiSaver withdrawal before auction day.
Mistake 6: Not Coordinating Between Parties
The problem: Your application involves your KiwiSaver provider, solicitor, and bank. Poor communication between them causes delays.
The solution: Use a mortgage adviser to coordinate all parties and ensure everyone understands the timeline and requirements.
How Luminate Can Help You Access Your KiwiSaver
At Luminate, we specialize in helping first-home buyers navigate the KiwiSaver withdrawal process and build comprehensive funding strategies. Here's how we support you:
Our First Home Buyer Services
KiwiSaver Strategy Session We'll review your KiwiSaver balance, explain how much you can withdraw, and help you understand the timing and paperwork required.
Mortgage Pre-Approval We work with all major banks and many specialist lenders to find the best mortgage options for your situation, including First Home Loans.
Deposit Planning We help you structure your deposit using KiwiSaver, savings, and other available schemes to maximize your buying power.
Coordination & Communication We liaise with your solicitor, KiwiSaver provider, and lender to ensure everything runs smoothly and on time.
Ongoing Support From your first inquiry through to settlement and beyond, we're here to answer questions and solve problems.
Frequently Asked Questions About KiwiSaver First Home Withdrawal
Can I use my KiwiSaver to buy an investment property?
No. The KiwiSaver First Home Withdrawal can only be used to purchase a home you intend to live in as your primary residence for at least 6 months after purchase.
How long does it take to get my KiwiSaver money?
Most KiwiSaver providers require 10-20 business days to process First Home Withdrawal applications. Some may be faster, others slower. Always apply as early as possible after signing your Sale and Purchase Agreement.
Can my partner and I both use our KiwiSaver?
Yes. If you're buying together and both meet the eligibility requirements, you can each withdraw from your own KiwiSaver accounts. This can significantly boost your combined deposit.
What happens to my KiwiSaver after I withdraw?
Your KiwiSaver account remains open and active. You'll continue making contributions (and receiving employer and government contributions) for your retirement. You just won't have access to these funds again until you retire or meet other withdrawal criteria.
Do I need to pay tax on my KiwiSaver withdrawal?
No. The KiwiSaver First Home Withdrawal is not taxed. You receive the full amount available in your account (minus the $1,000 kick-start if applicable).
Can I withdraw my KiwiSaver before finding a house?
No. You need a signed Sale and Purchase Agreement to apply for the withdrawal. The funds must be used for a specific property purchase and are paid directly to your solicitor, not to you.
What if my KiwiSaver provider declines my application?
If your application is declined, your provider must give you a reason. Common reasons include not meeting the 3-year membership requirement, not having a valid Sale and Purchase Agreement, or the property not being for your own use. You can reapply once you've addressed the issue.
Can I use KiwiSaver for a house and land package?
Yes, but there are special considerations. For house and land packages, you may need to apply for two separate withdrawals (one for the land, one for the house) depending on how the contracts are structured. Speak with your solicitor and mortgage adviser early in the process.
What if I've been contributing to KiwiSaver for less than 3 years?
Unfortunately, you cannot access the First Home Withdrawal until you've been a member for at least 3 years. However, you may still qualify for the First Home Grant (different eligibility criteria apply) and you can continue building your deposit through savings.
Does my KiwiSaver need to be with a specific provider?
No. You can use any KiwiSaver provider for the First Home Withdrawal. However, processing times and customer service vary between providers, so it's worth researching their reputation before you need to make a withdrawal.
Can I use my KiwiSaver for a home under construction?
Yes, but the timing and process can be more complex. For new builds, you may need to coordinate your withdrawal with construction milestones and progress payments. Your solicitor and mortgage adviser can help structure this properly.
What if I change my mind after withdrawing?
Once your KiwiSaver funds have been withdrawn and used for a property purchase, you cannot return them to your account. If you decide not to proceed with a purchase before settlement, speak with your solicitor immediately about returning the funds to your KiwiSaver provider.
Take the Next Step Toward Homeownership
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, improve your chances of getting mortgage approval, and help you buy your first home sooner.
The key to success is planning ahead. Understanding the rules, talking to your KiwiSaver provider and solicitor early, and giving yourself enough time to meet all the conditions will ensure a smooth process.
At Luminate, we've helped hundreds of first-home buyers access their KiwiSaver, navigate the application process, and create comprehensive funding strategies that get results.
Ready to Use Your KiwiSaver for Your First Home?
Book a free First-Home Strategy Session with Luminate today.
We'll help you:
- Understand exactly what you can withdraw from your KiwiSaver
- Guide you through the paperwork and timeline
- Work alongside your solicitor and lender to make the process seamless
- Explore other schemes like the First Home Loan and First Home Grant
- Create a complete funding strategy to buy with confidence
Contact Luminate:
📞 Call 0800 333 400📧 Email askus@luminate.co.nz
🌐 Visit luminate.co.nz
Disclaimer: This article provides general information only and should not be considered financial advice. KiwiSaver and First Home Loan eligibility criteria, income caps, and price caps are subject to change. Always speak with a qualified financial adviser and your KiwiSaver provider about your specific situation.
