Three years in KiwiSaver is the magic number when it comes to qualifying to withdraw funds for first-home.

I am in a KiwiSaver scheme and have been for the past five or so years.
Last year I studied and hence did not contribute much and as of a week or so ago am on a "payment holiday".
My question is, if I wanted to use the money for my first home, is 100 per cent of what I have available to me or am I only entitled to withdraw my contributions?

One of the benefits of KiwiSaver is anyone saving to buy their first home can dip into their KiwiSaver funds to boost their deposit.

If you've been in KiwiSaver for several years, as you have, there might be a tidy little sum to help you get into your own home more quickly, even after a wee break from making contributions.

Fiona Oliver, general manager, wealth management at AMP, talks through the rules around using KiwiSaver to buy a first home.


"In order to qualify for the 'withdrawal for purpose of purchase of first home' as outlined under the KiwiSaver Act you can make a withdrawal if three or more years have passed since the IRD received your first contribution to a KiwiSaver scheme," Oliver says.

"Given you've been saving for more than five years; you would be able to withdraw all of your member contributions and employer contributions and any investment earnings on those amounts.

"So long as the three years have passed (as described above) it does not matter that you're on a contributions holiday at the moment. However, it's worth being aware that you are unable to withdraw the $1000 government kick-start or any member tax credits," Oliver says.

"Good luck with the rest of your study and the purchase of your first home."

It's a good idea to contact your KiwiSaver provider when you start house hunting.

Not only will it be able to give you an idea of how much money you could potentially put towards your house deposit, but it means you're clear on the documentation your KiwiSaver provider needs to see and the lead-in time required to process your application.

The funds will be deposited into your lawyer's trust account by your KiwiSaver provider at settlement time, so you won't be paid out a lump sum and the funds can't be paid in retrospect if the sale has already gone through.

To release your funds for a first home purchase your provider will want:

*A copy of the sale and purchase agreement that shows you are the purchaser.

*An undertaking from your lawyer that the sale and purchase agreement is unconditional.

*An undertaking from your lawyer that the withdrawn KiwiSaver funds will be paid to the seller as part of the purchase price or repaid to your KiwiSaver provider if the sale does not got through.

It would also be wise to see if you are eligible for the KiwiSaver first-home deposit subsidy, administered by Housing New Zealand.

Once you've contributed towards KiwiSaver for three years at the minimum percentage of your total income, you could be eligible for the deposit subsidy, which will pay out $1000 for each year you've been a member, up to a maximum of $5000.

This subsidy is aimed at people on a modest income - either less than $80,000 for an individual in the past 12 months or $120,000 for two or more buyers in the past 12 months - and there are price caps on the house you plan to buy.

Auckland has the highest price cap at $485,000, but it varies across the country depending on the average cost of an entry-level house.

To get the deposit subsidy you need to have 10 per cent of the deposit yourself - this is where some of those KiwiSaver funds could help get you over this line.

Housing New Zealand says you need to submit your application at least four weeks before your settlement date, but if you have not yet found a home to buy and want to know if you are eligible or not, you can get a pre-approval that is valid for 180 days.

Housing New Zealand won't pay out after the house sale has gone through so, like the KiwiSaver withdrawal, a bit of pre-planning will help the process to run smoothly.

You can find out more information, download the application form and find out how to obtain the relevant supporting documents at

If you are on a modest income and looking at buying an entry-level house you could also be eligible for a Welcome Home Loan.

Also run by Housing New Zealand, the Welcome Home Loan has the same income and house price criteria as the KiwiSaver deposit subsidy.

Banks are now generally requiring at least a 20 per cent deposit to give you a home loan but with the Welcome Home Loan you need to have saved only 10 per cent with the Welcome Home Loan bridging the gap.

More information can be found on the Welcome Home Loan website:
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.
To have your KiwiSaver questions answered by the NZ Herald's panel of industry players email Helen Twose,