Changes to KiwiSaver Homebuyer’s withdrawal
The government has announced some changes to KiwiSaver withdrawals for 2nd chance first home buyers that will come into place on the 1st of July 2016.
I have read a couple of articles and there is some confusion about what it all means, so I thought I would clarify this for everyone.
There are two aspects to KiwiSaver assistance for buying a home.
First, the KiwiSaver withdrawal, and secondly the Home Start Grant.
If you are a first home buyer and have never owned a home before, you get your KiwiSaver provider to confirm you can withdraw your funds, and you apply to Housing New Zealand Corporation for the Home Start Grant.
If you are a 2nd chance first home buyer, you have to first apply to Housing NZ for permission to withdraw your KiwiSaver, on the same form you use to apply for the Home Start Grant. Once housing NZ approves you as a 2nd chance buyer, you go back to your KiwiSaver provider with that approval to get your KiwiSaver withdrawal confirmation.
So far, all makes sense right?
The current rules for both the withdrawal and Home Start Grant are:
First home buyer
Withdrawal - Home start
No income requirements - $80 000 max for 1 borrower, $120 000 for 2 or more
No maximum assets - 20% maximum assets compared to the max purchase price (so $90 000 for a $450 000 house).
2nd Chance First Home Buyer
Withdrawal - Home start
$80 000 max for 1 borrower, $120 000 for 2 or more - 20% maximum assets compared to the max purchase price (so $90 000 for a $450 000 house)
$80 000 max for 1 borrower, $120 000 for 2 or more -.20% maximum assets compared to the max purchase price (so $90 000 for a $450 000 house).
So what’s changing?
The bit that is changing is the maximum income for the 2nd chance first home withdrawal is being removed, so it does not matter what you earn, you can get your money out.
It’s not changing for the Home Start Grant, but just to get your own money out. And there are no changes for people who have never owned a home before.
What difference will this make?
Well if you have owned a home before, but earn over the cap, you can now get your money out of KiwiSaver to fund your first home.
This could well speed up your ability to get into a home, and I can already think of a lot of clients this will help.
It won’t help if you already have over the asset cap, so it’s for genuine cases of people in a first home buyer’s situation, but it’s a good boost for those who used to own a home, came out with little to nothing, but have a bunch of money still in KiwiSaver.
If you have used KiwiSaver before, you cannot withdraw it twice, and you cannot take out any Australian super or UK pensions that have been transferred in, but other than that, you can withdraw all but the first $1,000 of your fund.
The Housing New Zealand Corporation site has an official notice of the change, but if you have any questions on this, let DUX know, and we can provide advice and make it easy for you to get into your (2nd chance) first home.