Q: If two sons each inherit a 25 per cent share in the family home as tenants in common with the remaining parent who continues to live there, does this affect a first-home withdrawal or HomeStart using KiwiSaver funds?The first-home withdrawal, one of the few opportunities to withdraw some KiwiSaver funds before retirement, is aimed at helping those who don't own property get into a home.

A:

I asked Donna Nicolof, BNZ's head of wealth and private banking, how providers would treat an application from your sons.

Nicolof says one of the criteria to qualify as a first-home buyer is that you have never held an "estate in land", either solely or jointly with another person.

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"Unfortunately, because the two sons each continue to hold a 25 per cent share in the family home, neither of them qualifies as a first-home buyer."

There are exceptions to the general rule so it is important to talk to your KiwiSaver provider or Housing New Zealand about your eligibility to access KiwiSaver funds or the HomeStart grant.

Previous homeowners who no longer own property can dip into their KiwiSaver funds to get back on the property ladder, but they need to be in the same financial position as a first-home buyer and can't have used KiwiSaver in the past.

Housing New Zealand, which assesses the applications on behalf of KiwiSaver providers, will look at your realisable assets: bank deposits, shares, expensive boats and caravans, classic cars and motorbikes. Income caps in place for previous homeowners will be dropped on July 1.

Those applying to access KiwiSaver as previous homeowners may also be eligible for the HomeStart grant.

The HomeStart grant, administered by Housing New Zealand, provides an extra boost for those on more modest incomes to help them buy a home.

To apply for a HomeStart grant you must be making regular contributions to KiwiSaver - generally 3 per cent of your total income - must earn $80,000 or less as a sole purchaser, or a combined income of $120,000 or less for a couple or several people and have a 10 per cent deposit, which can include money in your KiwiSaver account.

The check-list for the HomeStart grant is at the Housing New Zealand website: tinyurl.com/h4e8xow.

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Unlike with the KiwiSaver first-home withdrawal, people claiming the HomeStart grant will also be limited to buying a house worth less than $550,000 in Auckland, $450,000 in cities including Hamilton, Tauranga, Wellington, Nelson, Christchurch and Queenstown, and $350,000 elsewhere in New Zealand.

You can buy an existing home, in which case the grant will be between $3000 and $10,000 depending on your circumstances, but if the grant is used to buy a newly built or yet-to-be-built home the grant doubles.

The home purchased with the HomeStart grant must be lived in for at least six months from settlement or receiving a code of compliance or you risk having to pay the money back with interest.