Member tax credits will be available as well as a more generous HomeStart grant.
We are looking at purchasing a first house in the next couple of months.
I have been in touch with my KiwiSaver provider regarding the changes to the KiwiSaver first home withdrawal scheme on April 1, being that "In addition to being able to withdraw both your and your employer's contributions plus earnings, you will also be able to withdraw your member tax credits.

"This means effectively that you will be able to withdraw all your KiwiSaver funds with the exception of the $1000 kickstart."

They have advised that as far as they know it has not been fully approved yet.
Are you able to confirm if the changes have been approved?
Is there some official documentation confirming this?

As you point out, change is afoot for KiwiSaver first-home withdrawals but before I update you on where things are at we'll rewind to last year.

In the heat of the election campaign the National Party announced some modifications to KiwiSaver to help first-home buyers pull together a deposit.

It promised to allow first-home buyers who have been in KiwiSaver for three years to withdraw from their KiwiSaver account not only their contributions, the money their employer has tipped in and any investment earnings, but also any member tax credits they might have earned.

Currently the tax credits are off-limits for first-home buyers, as is the $1000 kickstart, which even after the changes cannot be touched. The National Party also said it would tweak the KiwiSaver first-home deposit, which gives first-home buyers who are on modest incomes an extra cash boost of up to $5000 for individuals and $10,000 for a couple on top of any money they can withdraw from their KiwiSaver account.


Now known as the KiwiSaver HomeStart grant, it provides up to $10,000 for individuals and up to $20,000 for couples to help with the costs of building or buying a brand new home.

For anyone buying an existing home the grant stays at its old level.

The house price caps in place for the grant are also due to be lifted to reflect the rise in house prices and now range from $550,000 in Auckland down to $350,000 for many parts of the country -- that's a boost of between $25,000 and $100,000 on the current house price caps.

Housing New Zealand approves applications for this grant and more information on the application process is available on its website (

All these changes are set to take effect on April 1 so in the background the KiwiSaver rules are being revised and KiwiSaver providers and Housing New Zealand are modifying their systems.

As of today the legislation needed to alter the KiwiSaver rules is working its way through Parliament.

A quick check on the Taxation (KiwiSaver Homestart and Remedial Matters) Bill ( shows that the timetable to have it introduced into the lawbooks won't be wrapped up until late next month.

But after getting in touch with the office of Todd McClay, the Government minister who oversaw the introduction of the bill, I've been assured everything is on track to hit the April 1 deadline.


A spokesperson for McClay says: "The Taxation (KiwiSaver Homestart and Remedial Matters) Bill is currently before the House and contains the legislative amendment required to allow members to withdraw their member tax credits when purchasing their first home.

"As announced by the Government, the HomeStart policy changes will all take effect from April 1 and this bill is expected to be passed before that date.

"Members will be eligible to withdraw their member tax credits as long as settlement is after April 1.

"Whether providers are willing to accept applications for member tax credit withdrawals ahead of April 1 is a matter for those providers.

"In any case the withdrawals would not be able to be made before the legislation is passed."

And further confirmation from the IRD that the April 1 deadline is still on target: "We expect that the bill will be reported back to the House in sufficient time for it to progress through all stages and be passed before April 1."

So your provider is right to be cautious about approving the withdrawal of member tax credits to put towards a first home come April 1 without the necessary rule changes in place.

To do so would put it in breach of the current KiwiSaver legislation and one provider I spoke to said it could see it losing its licence to provide KiwiSaver.

But with less than a month to go until the changes are scheduled to come into effect anyone house hunting now is likely to have a settlement after April 1 or will be able to negotiate a settlement beyond that period.

•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, Sorry, but Helen cannot answer all questions, correspond directly with readers, or give financial advice.