“My income is too high to be able to use KiwiSaver to purchase my first home”, was a comment made in passing to me today.
Is this true? A lot of people mix up First Home Loan (previously called the Welcome Home Loan), First Home Grant (previously called the HomeStart Grant) and KiwiSaver, not realising that they are in fact three different products. There are similarities, but also differences.
Let’s start with KiwiSaver. You can use it to buy your first owner-occupied home, provided you have been in the scheme for a minimum of three years. We do recommend if you are planning to use your KiwiSaver to purchase your home, that it is a good good idea to contribute to it in order to qualify for the First Home Grant and/or Member Tax credits. We all love free money after all?
No. According to the eligibility criteria on the KiwiSaver webpage, you must have been a member. In the past, you must have contributed for 3 years however this has now changed.
You are eligible for all of the funds in your account except for $1,000. If you have brought back some Superannuation from the UK or Australia, this will most likely have to stay in the fund as well. These countries have different rules for withdrawing money so aren’t eligible for withdrawal for your first home.
In essence, all money you have put in while in NZ, your employer has put in, profits you’ve made and Tax Credits from the government are eligible to withdraw except for $1,000.
No, regardless of whether you earn $0 or $2M you can still withdraw your KiwiSaver to purchase your first home.
Maybe… Sometimes… There are criteria that apply, so chat to us about your specific circumstances.
You can use your KiwiSaver, but your partner will not be able to use theirs. If they purchased their home without the use of KiwiSaver, they may qualify to use their funds provided they are "in the same position as someone purchasing their first home". Talk to us more about this particular quirk if you are in this position.
First Home Grant has a few more conditions attached and many of those conditions are the same as for the First Home Loan.
To qualify for the First Home Grant you must contribute to KiwiSaver for a minimum of three years and there are minimum amounts you need to contribute. This does not apply to First Home Loan.
Let's look at some conditions that First Home Loans and the First Home Grant have in common.
One of the reasons that the KiwiSaver First Home withdrawal and the First Home Grant are often confused is that you apply for them on the same form (but they have different criteria). Just keep in mind that there are significantly less criteria to get your KiwiSaver out.
First Home Loans do tend to have additional conditions, which are hard to find documented anywhere. These are a few of the ones we know.
No. You might not have been contributing to KiwiSaver for three years, but you could still qualify for a First Home Loan. You may have not been working in the same job for one year, or the same industry for two years, but you may still qualify for the First Home Grant.
Using my knowledge to help guide you through the process can make a huge difference to what you can achieve and most of my clients are surprised by the unexpected value they gain from talking to me.
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