KiwiSaver & First Home Grants

If you’re looking at purchasing your first home, using your KiwiSaver investment is a fantastic way to get a head start toward your deposit. I thought it may be worthwhile just covering some of the rules for individuals who are struggling to keep up with some of the changes as they happen. As I write this in 2023, the current rules are as follows:

Withdrawing KiwiSaver:

 I’m a strong advocate of being a member of a KiwiSaver scheme because of the returns you get – the Government matches you at 50 cents on the dollar up to $1,042.86. This means that every year if you contribute at least this amount, you’ll get $521.43. I don’t know any other investment that guarantees a 50% return.

In addition to this, your employer contributes to your KiwiSaver investment too – up to 3% of your earnings in most cases – is my understanding.

Based on the above you’re getting $1.50 for every dollar contribution you make (assuming you’re making a 3% contribution) up to $1,042.86, and $1 for $1 every dollar thereafter! 

KiwiSaver HomeStart Grant:

There are two types:

1.    For existing property purchases – the grant is between $3,000 and $5,000 based on $1,000 per year of KiwiSaver membership.

2.    For new property purchases, the above is doubled (between $6,000 and $10,000) based on $2,000 per year of KiwiSaver membership.

The above figures are per KiwiSaver contributor, so if you’re in a couple and purchasing a home together, these figures are doubled again. The maximum contribution however, toward a single dwelling – regardless of the number of KiwiSaver contributors is $10,000 per existing home and $20,000 per new home, so if you are 3 or more people purchasing a home, you will only receive the benefits as if you were 2 (assuming all had been in for 5 years).

The rules to getting access to this are as follows – you must;

• Have been contributing the required minimum amount to a KiwiSaver scheme for at least 3 years
• Be 18 or over
• Be purchasing/building your first home
• Have a household income  in the last 12 months before apply (before tax) of less than:
  • $95,000 or less before tax for an individual buyer
  • $150,000 or less before tax for an individual buyer with one or more dependents
  • $150,000 or less before tax for 2 or more buyers, regardless of the number of dependents.
• Have a deposit that is 5% or more of the purchase price of the house you want to buy or build.
• Be planning to live in the house for at least 6 months from the settlement/completion of the property.

Another key thing to check is if the property is eligible - mainly this relates to house price caps which can be found here.

If you’ve got any other questions or are still uncertain about accessing a KiwiSaver scheme or your KiwiSaver investment – feel free to get in touch.

Ryan Smuts
July 2023