KiwiSaver HomeStart

OVERVIEW

As part of the “HomeStart” package announced by the Government in August 2014, the bill proposes to extend the current KiwiSaver withdrawal rules for first-home buyers from 1 April 2015.

Under the current rules, KiwiSaver members who are purchasing their first home are able to withdraw the contributions they and their employer have made, to supplement a deposit on a first home. The proposals in this bill will allow them to also withdraw their member tax credits.

HOMESTART – WITHDRAWING MEMBER TAX CREDITS

(Clause 6)

Summary of proposed amendments

The bill amends the KiwiSaver Act 2006 to allow KiwiSaver members to withdraw their member tax credits when purchasing their first home.

Currently the rules exclude “Crown contributions” which include both member tax credits and the $1,000 kick-start contribution. From 1 April 2015 only the kick-start contribution will be excluded.

Application date

The amendment will apply from 1 April 2015.

Key features

The bill amends schedule 1, clause 8(4)(a) to change the components of the member’s funds that cannot be withdrawn for their first home.

Background

KiwiSaver members are currently able to withdraw the contributions they and their employers have made to their KiwiSaver funds to supplement a deposit on a first home after three years. They are not able to withdraw the $1,000 kick-start or member tax credits paid by the Government. The proposed new rules will allow them to withdraw the member tax credits, but not the $1,000 kick-start.

The change is part of the Government’s “HomeStart” package of proposals to provide greater assistance to New Zealanders saving to buy their first home.