Getting into a first home takes careful planning and, for most of us, serious budgeting! The good news is if you’re a KiwiSaver member, you may be able to get help to purchase your first home.

The KiwiSaver first home withdrawal scheme helps first home buyers purchase a residential property in New Zealand. Being a member of KiwiSaver can be a great kick start to save money for your first-home deposit.

For first-home buyers, you might be eligible to withdraw money from your KiwiSaver account to buy a house if you have been a KiwiSaver member for at least three years. So, it’s important to understand the KiwiSaver first home withdrawal rules and legislation, and the KiwiSaver withdrawal process.

In this week’s blog, our guest expert, Shelley Funnell, discusses the KiwiSaver withdrawal process for first-home buyers. Shelley is a lawyer practising in everyday law - basically the GP of the legal world. She specialises in conveyancing, trusts, wills, enduring powers of attorney, small to medium business financing and sale and purchases, as well as relationship property advice and agreements.

So, it’s time to take a look at the four steps Shelley recommends for the KiwiSaver first home withdrawal process.

How First Home Buyers can withdraw their KiwiSaver without confusion

Video Timeline

1. Check your eligibility with your KiwiSaver provider - 01:47

2. Talk to your solicitor before you sign a property sale and purchase agreement - 02:05

3. Leave enough time to withdraw your KiwiSaver funds - 03:54

4. Get each document prepared and submitted by your solicitor - 04:41 

5. Need an excellent solicitor? Here’s why you should choose Shelley Funnell - 07:05

1. Check your eligibility with your KiwiSaver provider

To qualify for a KiwiSaver first home withdrawal, you need to have been in KiwiSaver scheme for a minimum of three years. There are other criteria that you must meet, so the first step is to contact your KiwiSaver provider and check their policy on withdrawals for first homes.

Also, check your KiwiSaver balance with your provider and work out how much you could withdraw. Then you can work with your mortgage broker to understand how much you might be able to borrow, which is the first step towards property hunting.

2. Talk to your solicitor before you sign a property sale and purchase agreement

After you have an idea about what you can afford, you can start property hunting.

If you intend to use the savings in your KiwiSaver towards your first home deposit, talk to your solicitor before you sign a property sale and purchase agreement. This is because the withdrawal process is time-consuming, so you need to ensure that your solicitor has enough time to organise the KiwiSaver withdrawal and to complete the required paperwork for you. Also, you need to get an undertaking solicitor to hold the funds you receive from your KiwiSaver withdrawal.

Remember to talk to your KiwiSaver provider as well. Each KiwiSaver provider has a different policy. Some KiwiSaver providers allow you to withdraw the KiwiSaver funds while your property sale and purchase agreement is conditional, which would make it easier for you to use the funds as the deposit. In contrast, other KiwiSaver providers won’t allow you to withdraw your funds until you sign an unconditional agreement. 

3. Leave enough time to withdraw your KiwiSaver funds

Many KiwiSaver providers require at least 10-15 working days from the date of receiving the solicitor’s letter to process a withdrawal application. If your property sale and purchase agreement is conditional and you want to use your KiwiSaver funds as the deposit, you need to leave enough time to withdraw your KiwiSaver funds. This is because it takes time to meet all the conditions on your agreement. As there are still a small number of KiwiSaver providers who won’t pay your funds to your solicitor until your agreement is unconditional, the process can become very stressful to first-home buyers if you’re not careful and prepared.

So, that’s why we highly recommend you talk to your solicitor in the early stages of purchasing your first home. 

4. Get each document prepared and submitted by your solicitor 

First, download and complete the KiwiSaver withdrawal application form provided by your KiwiSaver provider. Find the checklist on the form and go through each document required on the list. Sometimes the documents you need to provide to your solicitor and your mortgage broker are different. So, you need to prepare these documents very carefully.

Once you’ve prepared all the required documents, you need to sign a statutory declaration - your solicitor should witness this process. If you can get all your required documents ready before you meet with your solicitor, it could save you lots of time. Either a JP (Justice of the Peace) or a solicitor can witness the documents for you, but we recommend that you ask your solicitor to be the witness. This is because a solicitor can help check that all the information in the application form is filled out correctly, whereas a JP doesn’t have the same authority to do that.

The last step is attaching certified copies of supporting documents to the application. Shelley recommends that you get your solicitor to submit the application. This allows them to ensure that your application meets the rules and requirements of the KiwiSaver withdrawal policy. 

5. Need an excellent solicitor? Here’s why you should choose Shelley Funnell

•    Shelley is one of the most friendly, approachable solicitors around.

•    You’ll get clear, easy-to-understand advice in plain English. Shelley explains things to you without the jargon.

•    You’ll only be charged a fixed fee per transaction. This allows you to know exactly how much to budget, which is typically very helpful to first-home buyers. If you are not familiar with the process and other related details, Shelley has the expertise and can explain it to you. With a fixed price, you don’t need to worry about extra hidden fees, such as contacting your solicitor by phone or email.

•    Shelley is a mobile lawyer based in Auckland, which means you can meet her outside her office, such as at the airport, your home, or wherever is convenient for you. This would benefit people who are too busy to meet with a solicitor during regular working hours.

You can contact Shelley via: shelleyfunnell@hendersonreeves.co.nz or by calling: 027 537 9221

Prosperity Finance – here to help

Your first home buying journey starts here. With our simple to follow tips, you’ll be on the road to buying your first home. We are professional mortgage brokers and are here to hold your hands through each step of the process, from planning, getting a home loan pre-approval, house hunting and your big settlement day. Give us a call today on 09 930 8999.

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Disclaimer: The content in this article are provided for general situation purpose only. To the extent that any such information, opinions, views and recommendations constitute advice, they do not take into account any person’s particular financial situation or goals and, accordingly, do not constitute personalised financial advice. We therefore recommend that you seek advice from your adviser before taking any action.