Understanding KiwiSaver and the First Home Deposit Subsidy


When buying your first home, trying to understand KiwiSaver and the First Home Deposit Subsidy can be very difficult. Cavell Leitch can help you understand what you might be entitled to and the process you should follow.

First home buyers, in some circumstances, are eligible to drawdown part of their KiwiSaver contribution and may also be eligible for a First Home Deposit Subsidy from Housing New Zealand.

If you have been contributing to your KiwiSaver for three years or more you may qualify for the First Home Deposit Subsidy scheme. The subsidy is $1,000.00 a year for every year of contribution to KiwiSaver so will range from $3,000.00 to $5,000.00 each.  Applications can be pre approved and last for 180 days.  Applications take roughly a week to process and can be given to your bank to help obtain a financial pre approval.

Your KiwiSaver withdrawals will depend on the contributions you have made, how long you have been a member, what scheme you belong to and who administers your KiwiSaver scheme. We recommend talking to your provider as soon as you decide to start looking for your first home. Application timeframes vary but often they are able to provide you with an estimated figure once your application has been approved.

Most KiwiSaver schemes require at least 10 working days from receiving your solicitors confirmation that the agreement is unconditional through to settlement of the property to ensure funds are available on the date of settlement.

Having this all in place before you put in an offer can save a lot of time and stress. The timeframes around these withdrawals are strict and if you don’t adhere to them you may miss the opportunity to make your withdrawal, which could affect your ability to settle.

The main points to consider when submitting an offer are;

  • We recommend settlement is described as “15 workings days following confirmation”.
    This allows enough time to fill out and submit the relevant documentation prior to settlement.

  • You must live in the house immediately on settlement and reside in it for six months following settlement.
    This means your offer must be on the basis that “Vacant Possession” can be given on settlement.

  • Drawdown will not occur until settlement, so this money cannot be used for the deposit.

Statutory declarations must be made when submitting applications for both the KiwiSaver and First Home Deposit Subsidy, there are only certain people that can witness statutory declarations, with solicitors being one of them.  Feel free to come into our office and have this witnessed at anytime, no appointment necessary.

If you would like more information regarding how the KiwiSaver and First Home Deposit Subsidy works or to discuss the wider implications of putting in an offer including what terms you should make your offer conditional upon, please call 03 379 9940 to make an appointment with someone in our Property Team.

More information: http://www.hnzc.co.nz/buying-a-house/buying-a-home-with-kiwisaver/first-home-deposit-subsidy

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Copyright © Cavell Leitch. All rights reserved. Redistribution is only permitted with express written permission. For enquiries please contact us. This article by its nature cannot be comprehensive and cannot be relied on by clients as advice. It is provided to assist clients to identify legal issues on which they should seek legal advice. Please consult the professional staff of Cavell Leitch for advice specific to your situation.