KiwiSaver Withdrawal for purpose of ‘Second Chance’ Home Purchase
Previous home owners are eligible for the KiwiSaver first home withdrawal and KiwiSaver deposit subsidy if “the Minister of Housing or [a] delegate is satisfied that the income, assets and liabilities of the person represent a financial position that would be expected of a person that has never held an estate in land.” (clause 31(c), KiwiSaver Regulations 2006)
Who can apply?
A member may apply for a second chance home withdrawal, provided:
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at least three years has passed since the Commissioner received the first contribution for the member, or the Member has been a Member of one or more KiwiSaver schemes for at least three years; and
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the Member has not made a withdrawal from a KiwiSaver scheme for the purchase of a home before; and
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the property the Member is purchasing is, or is intended to be, the principal place of residence for the Member or for the Member and the member’s family; and
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the property the Member is purchasing qualifies as an estate in land within the meaning of the KiwiSaver Act 2006; and
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The Minister of Housing (or a delegate) is satisfied that the income, assets and liabilities of the member represent a financial position that would be expected of a person who has never owned a property.
Details of how previous home owners will qualify under the last bullet point above are set by HNZC and can be found on their website www.hnzc.govt.nz/kiwisaver.
Other exceptions (Rule 8(5) of the KiwiSaver Rules)
A KiwiSaver member may still be eligible if they hold or previously held an estate in land
- as a bare trustee; or
- as a trustee who is a discretionary, contingent, or vested beneficiary under the relevant trust; but has no reasonable expectation of being entitled to occupy the land as the principal place of residence for the person or the person’s family until the death of the person who currently occupies the land (the occupier) or the death of the occupier’s survivor.
What can I withdraw?
The one-off withdrawal does not include the Government $1,000 kick-start or the Member Tax Credits (disregarding any positive or negative investment returns for the purpose of calculating the amount of Government contributions).
How to apply for a KiwiSaver withdrawal as a previous homeowner:
This process is managed by HNZC. For more information and to apply visit:
http://www.hnzc.co.nz/kiwisaver andhttp://www.hnzc.co.nz/utils/downloads/4372180CE3F348846C0A0E1879A6DD4A.pdf
To assess whether a previous home owner is eligible for a second chance home withdrawal, HNZC will consider whether:
- the purchaser’s or purchasers’ income is within the income caps established for general eligibility for the deposit subsidy. The income caps are currently $100,000 before tax for one or two people, and $140,000 before tax for more than two people
- The purchaser(s) have realisable assets of no more than 20 percent of the relevant regional house price cap ($400,000 for Auckland City, North Shore City, Rodney District, Wellington City and Queenstown Lakes District and $300,000 for all other areas, including Manukau, Waitakere City, Franklin District and Papakura District). This asset test is to ensure that previous home owners who have insufficient assets to obtain a mortgage without Government assistance will qualify for first home withdrawal. HNZC’s website provides a summary of what it regards as realisable assets for this purpose.
In addition, as with the first home withdrawal conditions, before a withdrawal can be made, the trustee will require the following:
- a pre-printed bank deposit slip from the member’s solicitor’s trust account; and
- a certificate from the member’s solicitor enclosing a copy of the sale and purchase agreement which clearly shows the member as the purchaser and contains an undertaking in a form acceptable to the trustee, relating to the unconditional nature of the agreement and the application of funds withdrawn.