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.
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.
To qualify for the KiwiSaver First Home Withdrawal, you must meet specific criteria set by the government and your KiwiSaver provider.
| 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 |
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:
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:
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.
You can withdraw almost your entire KiwiSaver balance, with only a few exceptions.
| 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) |
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:
Note: These are estimates. Actual amounts depend on salary history, employer contributions, government contributions, and investment performance.
Applying for your KiwiSaver First Home Withdrawal requires careful planning and coordination with multiple parties. Here's exactly what you need to do.
Before making an offer on a property, confirm your eligibility:
You'll need a solicitor or conveyancer to handle your property purchase. They must:
Choose your legal representative early, as they'll need to be named on your withdrawal application.
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.
Contact your KiwiSaver provider and request their official First Home Withdrawal form. You'll typically need to provide:
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.
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:
| 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 |
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.
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.
Auction purchases require immediate deposits, which creates unique challenges for using KiwiSaver funds:
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.
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.
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.
| 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 |
Using both schemes allows you to:
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.
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.
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.
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.
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.
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.
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.
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.
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:
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.
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.
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.
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.
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.
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).
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.
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.
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.
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.
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.
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.
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.
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.
Book a free First-Home Strategy Session with Luminate today.
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📞 Call 0800 333 400Disclaimer: 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.