When Should You Apply for a KiwiSaver First-Home Withdrawal?
Once you have found the property you want to buy, you should apply for your KiwiSaver first-home withdrawal as soon as possible. In some situations, it may be appropriate to delay the application slightly, particularly if settlement is a long way off and the funds will only be needed at settlement rather than for the deposit.
If you are planning to use KiwiSaver funds for your purchase, it is important to speak with your lawyer before signing your agreement for sale and purchase. Your lawyer can help ensure the agreement allows enough time for the withdrawal to be processed before the deposit due date or settlement date.
If your KiwiSaver funds are being used to pay the deposit, an additional clause should be included in the agreement requiring the deposit to be held undisbursed until settlement. Your lawyer can arrange for this clause to be inserted into the agreement.
How the KiwiSaver Withdrawal Process Works
Although KiwiSaver funds can be used toward the deposit or settlement, the deposit is often due before the withdrawal can be processed. For that reason, timing is important. If you intend to use KiwiSaver funds, make sure your application is submitted well before any payment dates.
To apply, you will need to complete the first-home withdrawal application form provided by your KiwiSaver scheme provider. It is usually helpful to complete this form with your lawyer.
You can choose to withdraw as much or as little of your KiwiSaver balance as you like, provided that $1,000 remains in your account.
Different KiwiSaver providers have different rules about purchasing property through a trust or company. Many providers only allow the property to be purchased in your personal name, so it is important to check this with your provider.
Your completed application form and supporting documents need to be returned to your KiwiSaver provider by its required due date, usually at least 10-15 working days before the payment is due. Submitting the application earlier can help avoid delays.
On or before settlement day, the KiwiSaver funds are paid directly into your lawyer’s trust account, along with your loan funds and any other funds required for settlement. We will then transfer the funds to the vendor as part of the settlement process.
Seeking legal assistance
Buying your first home is an exciting milestone, and our team can guide you through the legal process from reviewing the agreement through to settlement. We regularly assist clients with KiwiSaver withdrawals and first-home purchases, helping ensure everything is in place for a smooth transaction.
if you’re planning to buy your first home and would like to understand how KiwiSaver can be used in the purchase, feel free to get in touch with a member of our property team.
This article is brief and general in nature. You should not treat this article as legal advice and should seek professional advice before taking any action in relation to the matters dealt with in this article. Armstrong Murray accepts no liability for losses suffered by any person or organisation who may rely directly or indirectly on this article.
