KiwiSaver savings withdrawals for previous home owners
Prior to July 2016, KiwiSaver withdrawals were only available to first home buyers and people who had previously owned property but had low assets and earnings. Applicants had to earn below the income limit, which was $120,000 for a couple and $80,000 for an individual, in order to be eligible.
As of 1 July 2016, the income limits from the previous house owner eligibility criteria have been dropped. Previous homeowners low levels of assets (determined by a “realisable asset” test) are now able to access their KiwiSaver funds to buy a home regardless of their income.
The rest of the eligibility criteria for a second chance withdrawal remain unchanged:
- You must not have received a first home KiwiSaver withdrawal before, and you must have been contributing to KiwiSaver for at least three years;
- You can have previously owned a home, but at the time of your application must no longer have an interest in a property;
- You must intend to live in the property; and
- Your realisable assets must be less than 20 percent of the house price cap for the area you are buying in. For example, the current house price cap in Wellington region is $450,000, so your realisable assets must be under $90,000.
If you meet the above criteria you can apply to Housing New Zealand for a Letter of Determination to submit to your KiwiSaver provider to show that you are eligible for the second chance withdrawal.
Please note that you should allow for the application for a Letter of Determination to take up to four weeks to process.
HomeStart Grants
As of 1 August 2016 the income and house price caps for HomeStart Grants have increased making HomeStart grants accessible to more first home buyers.
The income limit for eligibility under the HomeStart grant has increased to $85,000 for an individual and $130,000 for a couple with a joint income.
The house price caps have increased across the country by $50,000 for existing homes and $100,000 for new builds.
Previous owners are also eligible for the HomeStart grant. The realisable assets test as mentioned above will need to be satisfied in order to receive the grant and will be based on the price cap for existing homes.
Talk to us if you want to take advantage of these changes to KiwiSaver and we can help you come up with a plan to get your foot in the door.