New developments on KiwiSaver house withdrawals
April 13, 2015 at 2:51 PM
KiwiSaver is over eight years old, and with each passing year more and more people become eligible to withdraw money from their KiwiSaver to put towards their first home. Some changes in 2015 will make it easier to use KiwiSaver as a means to getting your foot on the property ladder.
To be eligible to withdraw money from KiwiSaver, you have to have been contributing for three years or more. According to recent media reports, the number of people who can and are doing that, is growing. The ANZ told media that more than 3890 made house withdrawals from their KiwiSaver in 2014, compared to 1248 in 2012.
An ASB spokeswoman said that as of the end of January 2015, more than 8293 people made first-home withdrawals from their ASB KiwiSaver Scheme. Essentially these people are taking advantage of the opportunity to withdraw all, or part, of their savings as well as employer contributions, towards their first home.
A number of criteria apply when it comes to making a property withdrawal from your KiwiSaver, including small complications like whether you are eligible if you have owned a house previously (but no longer do), or if you own property overseas. Housing New Zealand considers these on a case-by-case basis, but people who have owned property previously are likely to qualify if they earn below $80,000 per year as an individual, or $120,000 per year as a couple.
From 1 April, New Zealanders have been allowed to withdrew their entire KiwiSaver balance – except the $1,000 kick-start amount gifted to you by the Government when you first joined KiwiSaver. It does however include member tax credits, which is 50 cents for every dollar you contributed, (to a maximum of $521 a year).
In the past you could only withdraw from your KiwiSaver for the ‘settlement’ of the purchase of the property, but beginning 1 June you will be able to use this amount towards the ‘deposit’ for the home you are buying as well.