Q: My parents live in Wellington and have offered to manage an investment property if I buy one there, as I live in Auckland and travel a lot. How do I buy a house (not to live in, so without KiwiSaver), without relinquishing the opportunity to use KiwiSaver and HomeStart grants for my own house later on?
A: If you have been a KiwiSaver member for at least three years you may be eligible to withdraw your savings, except the last $1000, to put towards a first home.
This can include your contributions, money chipped in by an employer and any member tax credits earned, but not any money transferred from an Australian superannuation fund.
The rules are clear you can't use KiwiSaver to buy an investment property - it has to be for a house you intend to live in.
I ran your question past Sean Donovan, a KiwiSaver specialist at Milford Asset Management.
"Generally you are no longer allowed to withdraw on your KiwiSaver to purchase a second home," says Donovan.
Specifically, the KiwiSaver legislation says savers can take money out for a first home so long as "the member has not, at any time before applying to make a withdrawal under this clause (whether before or after becoming a member of the KiwiSaver scheme) held an estate in land (whether alone or as a joint tenant or tenant in common)".
However, in certain circumstances a previous home owner may still be eligible, says Donovan.
"Your KiwiSaver provider will require you to contact Housing New Zealand to determine if you're eligible to withdraw on your KiwiSaver."
To be eligible, you need to be in the same financial position as a first-home buyer.
This gives people who sold their family home as part of a relationship break-up or business failure a chance at getting their own home again.
As Donovan says, HNZ will evaluate your application, then make a recommendation to your KiwiSaver provider.
HNZ will take into account your annual income level - this needs to be under $80,000 for an individual or $120,000 for a couple - and your "realisable assets" , such as shares, term deposits, boats or caravans, classic cars and motorbikes.
If you made a KiwiSaver withdrawal to purchase the home you no longer own you won't be able to access KiwiSaver funds again under this second-chance option.