My partner and I want to use our KiwiSaver withdrawal to buy land for our first home. We are unclear whether we can use our KiwiSaver withdrawal to buy the land only. We don't need a loan to build as we already have savings to build a small house. Essentially, the house will be classed as a "tiny house" -- we would be lucky if it reached 45sq m. Thoughts?

New houses generally cover more than 200sq m, so your 45sq m will definitely make it "tiny" compared to current new builds.

You may not have the five bedrooms, en suite, media room, home office, butler's pantry, home gym and other modern "necessities", but heating, maintaining and cleaning your wee home will be a breeze.

Plus, it sounds like you have the building costs sorted, too.


The good news is, according to Sean Donovan from KiwiSaver provider Milford Asset, the first-home withdrawal can be used to buy land provided you meet the criteria: you have been in KiwiSaver for at least three years; the land is intended to be your main place of residence; you have not at any time held an estate in land (alone or as a joint tenant or tenant in common).

That last bit is legalese for never having owned a property.

"You are not allowed to withdraw your KiwiSaver money to pay for the cost of building a new home only," Donovan says. "However, withdrawing your KiwiSaver and using it to help buy the land to build your principal place of residence is allowed."

Good on you for checking.

I have had queries in the past from people who have bought land intending to use KiwiSaver to build a house, only to find they could not access their money.

Get in touch with your provider when you are starting to look for land to build on because you need to get paperwork through to get hold of KiwiSaver money.

Depending on your provider, you may be able to get approval before you start the land search. Or you can go straight to a first-home withdrawal application if you already have a sale and purchase agreement.

Your KiwiSaver provider pays the funds to your solicitor on settlement day, so it's important to have all the paperwork lined up because you can't apply for a first-home withdrawal after settlement day.


Good luck with the house build -- it sounds exciting.