How KiwiSaver can help you get into your first home


Reading time: 10 minutes

That first rung on the housing ladder can feel far out of reach at first, but KiwiSaver can bring it that much closer as you save and invest for a home of your own.

Although KiwiSaver was made for long-term investing for retirement, it can also be used for a first home. After all, owning your home sets you up for wellbeing in retirement as well.

It helps to know how using KiwiSaver for a first home works and the timings involved, so that everything can run smoothly for you – from saving up to settlement.

Using KiwiSaver for your first home

Typically you’ll need 20% of the house price for your first-home deposit – which is a big ask – but happily you can use your KiwiSaver money for all or part of it if you’re eligible. And you can get help from a government grant as well, right up to $20,000 for a couple building a new home.

If you are purchasing with your partner or friends, each of you can withdraw from your KiwiSaver. You’ll have different balances, so you can withdraw as much or as little as you need.

A KiwiSaver withdrawal and a KiwiSaver First Home Grant are two different things, and you can be eligible for both. You apply to withdraw directly with your KiwiSaver provider, and you apply for the grant with Kāinga Ora, the government agency.

How KiwiSaver can help you get into your first home

That first rung on the housing ladder can feel far out of reach at first, but KiwiSaver can bring it that much closer as you save and invest for a home of your own.

Although KiwiSaver was made for long-term investing for retirement, it can also be used for a first home. After all, owning your home sets you up for wellbeing in retirement as well.

It helps to know how using KiwiSaver for a first home works and the timings involved, so that everything can run smoothly for you – from saving up to settlement.

Using KiwiSaver for your first home

Typically you’ll need 20% of the house price for your first-home deposit – which is a big ask – but happily you can use your KiwiSaver money for all or part of it if you’re eligible. And you can get help from a government grant as well, right up to $20,000 for a couple building a new home.

If you are purchasing with your partner or friends, each of you can withdraw from your KiwiSaver. You’ll have different balances, so you can withdraw as much or as little as you need.

A KiwiSaver withdrawal and a KiwiSaver First Home Grant are two different things, and you can be eligible for both. You apply to withdraw directly with your KiwiSaver provider, and you apply for the grant with Kāinga Ora, the government agency.

See how KiwiSaver can be used for your first home

Got just a few minutes? Watch the video to learn what you need to know about using KiwiSaver for your first home.

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KiwiSaver First Home Grant and first-home withdrawal

KiwiSaver First Home Grant

If you’re in KiwiSaver and have been contributing to a scheme for at least three years, you may be eligible for a KiwiSaver First Home Grant. This means that you could get up to $5000 towards an older, existing home, or up to $10,000 towards a newly built home or land to build a new home on.

If you’re borrowing together with someone else, you can combine the grants, which means up to $20,000 if both of you have been contributing to KiwiSaver for five years. (There are other eligibility criteria, as well as regional house price caps. Here are examples of those who can benefit.)

KiwiSaver first-home withdrawal

After you’ve been contributing to KiwiSaver for three years, you will typically be able to withdraw almost all the money in your account to help buy a first home (except for $1000). This is called a KiwiSaver first-home withdrawal.

Even with just a 5% deposit, you also may be able to borrow enough to buy a first home under the government’s First Home Loan Scheme.

Find out more about First Home Loans, the KiwiSaver First Home Grant and the KiwiSaver first-home withdrawal on the Kāinga Ora website.

Eligibility rules for using KiwiSaver for your first home

If you’re eligible, you can withdraw all your KiwiSaver money (including the government contribution), except $1000. To be eligible you must: 

  • Have contributed to KiwiSaver for at least three years  
  • Not have owned a home or land before (although if you are in the same position as a first home buyer, you could get a second chance – check with Kāinga Ora)  
  • Be buying a home or land in New Zealand  
  • Intend to live in the home or on the land you’re buying for at least 6 months  
  • Have not made a first-home withdrawal before  

KiwiSaver contribution requirements

  • Any Australian Super money you have transferred to KiwiSaver cannot be withdrawn for a first home.
  • You must have been regularly contributing at least the minimum amount to KiwiSaver for 3 years, at least 3% of your total income.  
  • The 3 years don't have to be consecutive, as long as they add up to 3 years’ worth of contributions. For example, if you have been a KiwiSaver member for 3 years but took a 6-month savings suspension, you would be eligible only after contributing for another 6 months.  
  • Contributions must be made from all your sources of income, not just your main source of income.  
  • If you are a non-earner, you need to make voluntary contributions of at least 3% of the adult minimum wage based on a 40-hour week.  
  • If you are self-employed or on a benefit, you need to have made voluntary contributions at least once a year for 3 years of at least 3% of your annual income.  
  • If you have made a combination of automatic and voluntary contributions, the total amount needs to be at least 3% of your total annual income.  

If you’re eligible to use KiwiSaver for your first home, you simply apply directly to your KiwiSaver provider.

If you are a previous home owner looking for a second chance, you’ll need to be in the same financial position as a first-home buyer (so you no longer own your previous home). Kāinga Ora will need to decide first whether you qualify and will send a letter to your KiwiSaver provider to confirm this.

Check your eligibility early on

Find out if you’re eligible for a KiwiSaver withdrawal and First Home Grant early in your process, so you can plan ahead.

The KiwiSaver first-home withdrawal application process

1

Get preapproved for a First Home Grant.

A preapproval for the First Home Grant is valid for 6 months, so even if you are undecided on a property, it helps to have this done. But if you have already made a successful offer on a property and don’t have preapproval, you’ll need to apply at least 4 weeks before settlement for a First Home Grant. Here’s how to apply to Kāinga Ora.

2

Contact your KiwiSaver provider to start the withdrawal process.

Typically your KiwiSaver provider will need 10 working days to process your first-home withdrawal, but sometimes there can be delays.

If you don’t have your KiwiSaver money before settlement, you won’t be able to use it. Allow enough time before your settlement date to avoid stress.

3

Put together your supporting documents.

You’ll need:

  • Certified ID and proof of address
  • A bank deposit slip for your solicitor’s trust account
  • A copy of the sale and purchase agreement for the property you’re buying
  • Either:
    • A letter of undertaking – conditional agreement, to be completed by your solicitor if you’re using your KiwiSaver savings as a deposit, or
    • A letter of undertaking – unconditional agreement, to be completed by your solicitor if you’re using your KiwiSaver savings to pay part of the purchase price at settlement
4

Submit your application to your KiwiSaver provider.

The form will include a statutory declaration, which will need to be witnessed by a lawyer or justice of the peace, for example. Send in your documents with your application.

It will help to call or email your provider to make sure they received it. They should start to process it within 3 business days.

5

Receive your KiwiSaver money in your solicitor’s account.

On your settlement date, your lawyer will pass your money on to the seller’s lawyer, and you’ll receive the deeds to ownership and the keys to the property, which is now yours.

For more on the property-buying process in general, see settled.govt.nz

How to maximise your KiwiSaver to build up your deposit

The more you can contribute to KiwiSaver, the larger your first home deposit and the less costly your mortgage will be. This is where you want to go hard with your saving!

Check that the type of fund you’re in is aligned to your goal of buying your first home. Our KiwiSaver fund finder can help you find the type of fund that matches your timeframe for saving, then you can browse funds of that type to compare.

The moment that you decide you are going to withdraw from your KiwiSaver for a first home, you’ll want to change to a defensive fund with no ups and downs. That way you won’t experience unexpected market drops, and your money will be there when you need it. Here’s where to browse defensive KiwiSaver funds on Smart Investor.

How much will you have for your first home?

Use our KiwiSaver calculator to get an estimate of how much you could have for your first home.

That way you can make an informed decision about when to withdraw.

Try the calculator

KiwiSaver first-home buying FAQs 

How much should I contribute to my KiwiSaver?

There’s no one-size-fits-all answer. Let’s work backwards from your goals: how much would you like to have for your first home or retirement, and how soon? Those questions can drive your choices. Take a moment to put your information into our KiwiSaver calculator to get an idea if you’re on track to achieve those goals. Underwhelmed a bit? Try adjusting your contribution rate to see how much difference it makes. Finding a contribution rate that gets you to your goals and works with your budget is the key. Here’s our KiwiSaver calculator. 

How do I increase my KiwiSaver contributions?

If you’re an employee, you simply let your payroll or HR person know and fill out a form. You can also change your contribution rates through Inland Revenue. There are preset levels to choose from: 3%, 4%, 6%, 8% or 10% – but you can also put in any amount you like at any time by getting in touch with your provider. How much of a difference could this make? Here’s our KiwiSaver calculator to have a look. 

Are KiwiSaver withdrawals taxed?

No. When you take out your KiwiSaver money, either for a first home, financial hardship or to use to live on in retirement, that money is tax-free. Your KiwiSaver contributions are made after your income has been taxed, and the gains from your investments that you own in KiwiSaver are taxed as well. But when you withdraw for a first home or retirement at age 65, there is no tax to pay. It’s 100% your money to use. To withdraw your KiwiSaver money, contact your provider directly. 

How much can I get from a First Home Grant? Do I need to pay this back?

If you buy an existing home, you can get $1000 for each of the 3 (or more) years you've paid into your KiwiSaver. The most you can get is $5000 for 5 or more years.  

If you buy a new home or land to build on, you can get $2000 for each of the 3 (or more) years you've paid into your KiwiSaver. The most you can get is $10,000 for 5 or more years.  

You don’t need to pay it back, although there are circumstances that you do need to inform of any changes to your application after you submit it, which may affect your eligibility. 

What is the safest KiwiSaver fund if I’m going to withdraw soon?

Defensive KiwiSaver funds mostly hold cash and bonds, and out of all the five types of KiwiSaver funds, they protect you most from risk.

You won’t get the potential growth that you would in other types, but if you’re going to use your KiwiSaver money soon, especially within the next 1 to 3 years, they can be helpful. Here are all the defensive funds in KiwiSaver. 

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