Personal finance and KiwiSaver columnist at the NZ Herald

Helen Twose: Second home can still count as your first

For those who previously bought a house, qualification to withdraw savings is decided by Housing New Zealand.

Your current providers should be able to tell you the balance in your account and the amount that you could take out today
Your current providers should be able to tell you the balance in your account and the amount that you could take out today

My partner and I are both in KiwiSaver. We have tried to get information on the rules regarding how much we can both take out for our home.
It is a bit clearer for her as it's her first home and she has been in KiwiSaver for three years.
As for me, I will be in KiwiSaver for three years as of December 2013 and I have already bought my first home.
It was four years ago with my previous partner and I wasn't a member of KiwiSaver at the time. We split and had to sell in the first year.
We are in the same monetary situation as first-home buyers and I do not own any other property.
It looks like I qualify for the second chance first-home but no one can tell me outright. They said I have to wait until the three years before they can even tell me!

For your partner the answer is easy.

As long as it will be her principal place of residence, she can take out the balance in her account less the money the government has paid (the $1000 kick-start and the member tax credits).

This means that she can take out all of the money she has saved, that of her employer (if any) and all of the investment earnings.

This assumes that the employer has not paid more than the minimum and if they have, they have not placed any special conditions on the extra employer contributions.

In your case, if you qualify and you do not buy the house before December 1 this year, you will be able to take out the same as your partner.

The question is whether or not you qualify. Qualification under the "second chance" rules is determined by Housing New Zealand. You will need to apply to them and should do so soon.

While they may not be able to give you a definite answer until December, they should be able to tell you, based on your current situation, your likely position.

You can then find out the amount from your provider.

For both of you, your current providers should be able to tell you the balance in your account and the amount that you could take out today.

You might also think about reviewing your investment strategy between now and then.

Given that you plan to spend your money in the near future many investors in the same position would be looking to have a conservative option and probably cash to reduce the risk of the balance going down between now and when you will buy the house.
* Michael Chamberlain, SuperLife principal.

I'm hoping you can answer a few questions regarding the KiwiSaver scheme and whether it's appropriate in my situation.
I joined KiwiSaver in February this year and left New Zealand shortly afterwards. I haven't made any contributions as yet, although I have an account and an investor number.
I'm aware of the fact that I don't qualify for the annual member tax credit but I'm wondering now if this scheme is right for me at this stage.
I'm 55 years of age and the plan is to spend six months of the year in New Zealand and six months in Europe in 10 years' time, so this would be a way of funding the annual half-year in New Zealand.
Are there any tax concerns I should be aware of if I decide to contribute to the scheme as a non-resident? Also, if I decide now not to contribute, can I cancel the account and investor number easily?

Having joined and not contributed you will have an account with the $1000 kick start in it. You can save should you wish but any savings you make will not count for a member tax credit unless you are in New Zealand.

If you spend time in New Zealand you will qualify for a proportionate member tax credit.

Any member tax credit you receive is likely to make it an attractive investment relative to most others and therefore worthwhile saving at least the amount that will give you the maximum member tax credit you are entitled to.

If you were in New Zealand for half a year you would qualify for half the member tax credit and so should save twice this amount.

If you will not spend time in New Zealand before age 65 then it may or may not be an appropriate investment.

You will need to explore the tax implications of the country where you are a tax resident to see how it will affect your tax liability in that country. KiwiSaver may or may not be tax-efficient for you.

Because you are likely to have a low balance, as any savings will be just sufficient to claim the maximum member tax credit, you should make sure that your KiwiSaver provider has low fees otherwise the fees will consume a lot of the investment earnings of the $1000.

Lastly, if you have permanently emigrated, then in February next year you will be able to take out your current balance as a cash sum with no New Zealand tax payable.

This may be the better option.
* Michael Chamberlain, SuperLife principal.

Disclaimer: Information provided is stated accurately to the best of the respondent's knowledge at the time of publication. It is general in nature and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial product. Readers should seek independent financial advice specific to their situation before making an investment decision.

- NZ Herald

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Personal finance and KiwiSaver columnist at the NZ Herald

Helen Twose is a freelance business journalist who writes regularly about KiwiSaver and entrepreneurial companies. She has written for the Business Herald since 2006, covering the telecommunications sector, but has more recently focused on personal finance and profiling successful businesses.

Read more by Helen Twose

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