First home buyers, in some circumstances, are eligible to drawdown some of their KiwiSaver money and may also be eligible for a First Home Deposit Subsidy from Housing New Zealand.
If you have been contributing to your KiwiSaver for three years or more you may qualify for the First Home Deposit Subsidy scheme. The subsidy is $1,000.00 a year for every year of contribution to KiwiSaver so will range from $3,000.00 to $5,000.00 each. Applications can be pre approved and last for 180 days. Applications take roughly a week to process and can be given to your bank to help obtain a financial pre approval.
Your KiwiSaver withdrawals will depend on the contributions you have made, how long you have been a member, what scheme you belong to and who administers your KiwiSaver scheme. We recommend talking to your provider as soon as you decide to start looking for your first home. Application timeframes vary but often they are able to provide you with an estimated figure once your application has been approved.
Most KiwiSaver schemes require at least 10 working days from receiving your solicitors confirmation that the agreement is unconditional through to settlement of the property to ensure funds are available on the date of settlement.
Having this all in place before you put in an offer can save a lot of time and stress. The timeframes around these withdrawals are strict and if you don't adhere to them you may miss the opportunity to make your withdrawal, which could affect your ability to settle.
The main points to consider when submitting an offer are;
- We recommend settlement is described as "15 workings days following confirmation".
- This allows enough time to fill out and submit the relevant documentation prior to settlement.
- You must live in the house immediately on settlement and reside in it for six months following settlement.
- This means your offer must be on the basis that "Vacant Possession" can be given on settlement.
- Drawdown will not occur until settlement, so this money cannot be used for the deposit.
Statutory declarations must be made when submitting applications for both the KiwiSaver and First Home Deposit Subsidy, there are only certain people that can witness statutory declarations, with solicitors being one of them. Feel free to come into our office and have this witnessed at anytime, no appointment necessary.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.