How to withdraw your KiwiSaver for your first home, step by step

Using KiwiSaver for a first home is simple once you know the steps. Most of the stress comes from timing: leaving it too late, or not knowing your provider's rules. This guide walks you through it so the money arrives on time.

Can you withdraw your KiwiSaver?

You can usually make a first home withdrawal if you:

• have been a KiwiSaver member for at least three years
• are buying a home to live in, or land to build your home on
• haven't made a first home withdrawal before
• haven't owned a home or land before, in New Zealand or overseas

If you've owned property before, you might still qualify as a previous home owner in a similar financial position to a first home buyer. In that case, you apply to Kāinga Ora for an assessment first, then give their letter to your KiwiSaver provider.

How much can you take out?

Everything except $1,000. That includes your contributions, your employer's, the government contributions and the returns on all of them. The one exception is money transferred from an Australian super fund, which has to stay in.

If you're buying as a couple, you each apply to your own provider, so you each keep $1,000 in your account.

Deposit or settlement: choose one

You can only make one first home withdrawal, so you need to decide whether to use it for the deposit when your agreement goes unconditional, or for the balance at settlement. Your lawyer and mortgage adviser will help you choose. Whichever you pick, your lawyer needs the money in their trust account by that date.

The process, step by step

1. Check your eligibility earlyCheck the date you joined KiwiSaver and confirm you'll have three years by the time you buy. Previous home owners should apply to Kāinga Ora well ahead.
2. Review your KiwiSaver fundIf you're buying within a year or two, a big market fall could shrink your balance just when you need it. A short-term goal often suits a lower-risk fund. This is worth getting advice on, because it depends on your situation.
3. Choose a lawyer before you start house huntingYour lawyer handles the paperwork with your KiwiSaver provider, and they can witness your statutory declaration.
4. Get pre-approval for your home loanA mortgage adviser can confirm how much you can borrow and how your KiwiSaver fits into the deposit.
5. Sign your sale and purchase agreementMake sure the settlement date leaves time for the withdrawal to be processed. Allow at least 10 working days, and more if your provider is slower.
6. Complete your provider's withdrawal formEach provider has its own form. It includes a statutory declaration, which a lawyer or JP must witness.
7. Your lawyer sends their letterIt confirms the purchase details and their trust account. Your provider then processes the application, usually within 10 to 15 working days.
8. The money is paid to your lawyerIt's held in their trust account and used for your deposit or settlement. If the purchase falls through, it goes back into your KiwiSaver.

Common mistakes that cause delays

• Setting a settlement date that's too soon for the provider to process the withdrawal.
• Using an old version of the form, or a declaration that hasn't been properly witnessed.
• Leaving the previous home owner assessment until after you've found a house.
• Having your savings in a high-growth fund right before you need them, and getting caught by a market dip.

After you withdraw: rebuild and protect

Your account stays open with $1,000 in it, and your contributions carry on from your pay. Now your timeframe has changed from "a few years" to "retirement", so it's worth checking your fund type again. Make sure you're still putting in enough to get the full government contribution of $260.72 a year.

It's also the moment to protect what you've just bought. A new mortgage is usually the biggest debt a family will ever take on. See how much cover might suit you with my insurance calculator, or read about buying with a 5% deposit.

This article is general information, not personalised financial advice. Rules and criteria can change, so check the latest details with the official sources above or talk to an adviser about your situation.

About the author

Kyle Hasson (FSP1010252) is an Insurance and KiwiSaver Adviser at Moneyplant in Papakura. He helps young South Auckland families prepare for their first home, protect it, and keep growing their savings after. More about Kyle