How the KiwiSaver first home withdrawal works

For most first-home buyers in New Zealand, KiwiSaver is the deposit. It's the single biggest chunk of money you'll put on the table, and pulling it out is more involved than tapping "withdraw" in an app. Here's how it actually works, and the one timing detail that trips people up more than anything else.

What it is

If you've been in KiwiSaver for at least three years and you're buying your first home to live in, you can withdraw most of your savings to put towards it. That includes your contributions, your employer's contributions, and the government contributions, leaving a minimum balance of $1,000 in the account.

It's a withdrawal, not a loan. The money is yours. The process exists because the provider and your conveyancer have to confirm it's genuinely going towards your first home before it's released.

Who qualifies

You can generally apply if:

• You've been a KiwiSaver member for at least three years.
• It's your first home (or you're in the same financial position as a first-home buyer, which Kāinga Ora can confirm).
• You're buying somewhere you intend to live in, not an investment property.
• You haven't made a KiwiSaver first home withdrawal before.

Your provider has the final say on eligibility, and Kāinga Ora handles the "second chance" cases. If you're not sure, ask early rather than at settlement.

Quick note: the First Home Grant was discontinued on 22 May 2024. The KiwiSaver withdrawal and the First Home Loan are still live. If you read an older article promising a grant, that part's out of date.

How to make a KiwiSaver first home withdrawal

The steps below are roughly the order things happen in. Your conveyancer drives most of it once you're underway.

1. Check your eligibility and balance early. Confirm you've hit the three-year mark and ask your provider roughly how much you can withdraw. Do this before you start making offers, not after.
2. Get your KiwiSaver withdrawal form from your provider. Each provider has its own form. Most now accept e-signatures for your part.
3. Sign your Sale & Purchase Agreement. You need a signed agreement to apply. The withdrawal is tied to a specific property.
4. Send the form and contract to your conveyancer. They complete the legal section and give your provider a formal undertaking that the money will only be used for the purchase price.
5. Provider processes the withdrawal. This takes 10 to 15 working days. The money is paid to your conveyancer's trust account, not to you.
6. Funds go towards settlement. On settlement day your KiwiSaver money joins your other deposit funds and the bank's loan, and the whole lot moves to the seller.

The timing trap (read this bit)

Here's the one that catches people out. The KiwiSaver withdrawal takes 10 to 15 working days to process. That's two to three weeks. It is the single most common cause of a delayed settlement for first-home buyers.

If your settlement date is two weeks away and you've only just started the withdrawal, that's tight. Start it the moment you go unconditional, not the week before settlement.

This is exactly the kind of thing a good conveyancer chases for you. At Kemba, the KiwiSaver step sits on your dashboard with the clock visible, so it gets kicked off early and nobody's refreshing their email at 4pm on settlement day.

What it can and can't be used for

• ✅ The deposit and the rest of the purchase price.
• ✅ Buying with a partner (you can both withdraw if you both qualify).
• ❌ An investment property you won't live in.
• ❌ Legal fees, moving costs, or furniture. It goes to the purchase price, not the extras.