Your Legal FAQs about using your KiwiSaver to help to buy your first house

How do I know if I qualify to be able to draw down KiwiSaver? 

If you are enrolled in KiwiSaver and you haven't owned a property before (or you have owned it before but meet certain criteria) you might be able to use your KiwiSaver to help pay the purchase price of the property. The best place to find out if you qualify is by going straight to your KiwiSaver providers and ask them to send you an eligibility letter.

How much more will I need to pay for my legal fees with the extra steps for using KiwiSaver?

Using your KiwiSaver does add additional requirements to the usual process, so you should expect to pay an additional amount for your legal costs. The Your Legal team have processed hundreds of KiwiSaver applications so we can assist you with the process in an efficient and cost-effective manner. 

What do I need to know about the lending process and using KiwiSaver?

Almost all KiwiSaver providers will issue you with a letter confirming your eligibility to withdraw your KiwiSaver along with an estimate of how much you have in your fund. This is a useful document to have as it can be passed onto your lender when you apply for your loan pre-approval and Your lender will want to see an estimate of how much you will be drawing down. 

If you’re also eligible for the Kainga Ora first home grant, we use the eligibility letter as evidence of your deposit for them. So get onto your KiwiSaver provider and get an eligibility letter.

Once you have had your offer accepted you need to apply to withdraw your KiwiSaver. The application includes a statutory declaration, which means it has to be witnessed by a person authorised to take statutory declarations (such as Lawyers and Registered Legal Executives), so get in touch with us as soon as possible to front-foot the process.

Note: you can’t apply to draw down your KiwiSaver after the settlement process, so make sure you start the process at the very outset by getting an eligibility letter from your Provider. 

Can I borrow the money from mum and dad, and then pay them back with the KiwiSaver?

The short answer is no. The funds must be drawn down and can only be applied to your home purchase. If you don't have the funds by settlement then you simply cannot use your KiwiSaver for your purchase.

What changes are there to the process of paying a deposit and using KiwiSaver?

A deposit is usually paid with your saved cash. As special rules apply to the use of your KiwiSaver for a deposit, make sure you tell the real estate agent that you are using your KiwiSaver funds so they can record that you will be paying the deposit from your KiwiSaver. Even if you are using a combination of cash and KiwiSaver, the special rules still apply. Your Legal team will help you through this process.

What changes are there to the settlement process when using KiwiSaver

If you’re using your KiwiSaver at settlement (usually because you’ve paid cash for the deposit) you’ll still need to see us to complete the withdrawal application. We do this at the very beginning of the due diligence process so that by the time you are unconditional with your offer you will be sure that your KiwiSaver withdrawal has been approved.

Your KiwiSaver drawdown will be paid to us, not you, so don't expect the money to appear in your bank account. On the settlement day, we will pay out your KiwiSaver withdrawal to the vendors' lawyer along with the funds received from your bank loan and any of the remaining cash that you are putting towards your purchase.

What happens if I draw down my KiwiSaver and the sale doesn’t go through? 

If the purchase does not go through, for any reason, then we will need to pay back the money to your KiwiSaver account. Sometimes if you quickly find another property to purchase your KiwiSaver provider may allow us to hold onto the funds for that purchase although we may have to send them some additional documents for that to happen. If we do have to send your KiwiSaver funds back to your KiwiSaver provider when you do find the next house then you do have to go through the withdrawal process again.

As experts in the first home buyers process, talk to us as we probably have encountered almost all scenarios surrounding KiwiSaver applications.

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