Buying guide

Using KiwiSaver for your house deposit: a guide

Here’s how you can use Kiwisaver for your house deposit.

Last updated: 23 May 2023

What you’ll learn:

  • How to use KiwiSaver for your house deposit
  • Who can use KiwiSaver for their house deposit
  • How much Kiwisaver can you use for a house deposit
  • What is the KiwiSaver HomeStart grant?

One of the most daunting things about buying a home in New Zealand is saving up for a house deposit.

This process often takes years, and requires a lot of planning, discipline and hard-decision making, as well as being aware of the options available to help you achieve your goal.

One of these options is using your KiwiSaver to help get your house deposit. However, there’s often confusion about how this works, who can use it and how much of your KiwiSaver you can withdraw to put towards a home deposit. Here are your answers.

How much do you need for a house deposit in NZ?

How much you need for a house deposit in NZ varies. In some circumstances, it can be as little as 5%, though this isn’t the norm. The general rule of thumb is that you should aim to have 20% of the purchase price of the home saved up in your deposit. The national average price for a home in New Zealand in March 2023 was $866,000, according to our property price index. So, if you were buying a home at the national average price, 20% of this would be $173,200.

Using Kiwisaver can make a big difference to your deposit pot.

Can KiwiSaver be used for house deposit? How it works

The simple answer to this question is yes, certain home buyers can use their KiwiSaver for their house deposit. However, there are a few criteria you need to understand.

You might think of your KiwiSaver as primarily a mechanism for saving for your retirement. And while this is true, it is also designed to get you onto the property ladder. If you do this, you’ll of course have to start building up your retirement pot again from scratch (or nearly scratch), but it can make a big difference to the amount of deposit you can put together. This in turn will likely impact the size of the home loan you’re able to get.

It’s important to realise that not all KiwiSaver providers allow you to withdraw funds in this way, so you should check carefully that yours does before proceeding. If not, you might want to consider switching providers. Even among KiwiSaver providers who do permit withdrawals, there can be different policies governing how this process works, so ensure you understand all of this before you make a plan that relies on your KiwiSaver for making a purchase.

There are also a number of criteria you’ll have to meet:

  • You’re looking to buy your first home, or land to build your first home on (though you might still be able to use your KiwiSaver even if this isn’t your first property, see below).
  • You’ve been a member of KiwiSaver, or a complying superannuation fund for at least three years.
  • You’re buying a home or land in Aotearoa New Zealand
  • You intend this property to be your main place of residence.
  • You’ve never owned a house or land before - again, there are exceptions to this.

Who can use KiwiSaver for a house deposit?

As the above eligibility criteria suggest, this scheme is targeted mainly at first home buyers. However, it doesn’t totally exclude those who have owned a house or land before.

For example, ownership of Māori land doesn’t exclude you from putting your KiwiSaver towards your home deposit. Even if you’ve previously bought a house or land, if you’re in a similar financial position to a first home buyer and no longer own that asset, you might also be eligible to use your KiwiSaver. However, if this other property or land parcel was bought using KiwiSaver, you won’t be able to do so again.

If you think you might be able to use your KiwiSaver for a non first home purchase, you’ll need to contact Kāinga Ora so they can determine if you can proceed with this. You’ll then have to contact your KiwiSaver provider in the same way that anyone else would.

Can my partner/spouse also withdraw from their KiwiSaver?

This is a common question, as many people buy a home with their partner, spouse or even with friends.

The same rules above regarding previous home ownership apply here to each person. So, if your partner has previously withdrawn property (unless the exemptions apply) only you can withdraw from your KiwiSaver, and vice versa.

The same thing goes if you’re planning on buying a property with a group of friends. Regardless of who it is, you’ll all need to contact your providers individually and submit applications to make a withdrawal.

You and your spouse can both use your KiwiSaver to contribute to your deposit.

How much KiwiSaver can I withdraw for a home deposit?

This will depend on the policies of your provider. For example, there are some who will allow you to withdraw everything except the last $1,000, whereas others will have different policies.

It’s up to you to decide if you want to withdraw the maximum amount possible, or leave a little bit in there so that your retirement pot isn’t starting from absolutely zilch.

Of the amount in there, you should be able to withdraw funds that have come from:

  • Your contributions
  • Your employer’s contributions
  • Government contributions
  • Interest earned
  • Fee subsidies, if you get them

What is the First Home Grant?

The First Home Grant, administered by Kāinga Ora, is a scheme designed primarily to help first home buyers boost their home deposit. It used to be known as the KiwiSaver HomeStart grant, and you might still see it referred to under this name on some Government websites.

The First Home Grant can provide eligible home buyers with up to $5,000 towards an existing property, or $10,000 towards a new home.

Again, previous home or landowners might be able to apply for this grant if they haven’t used it before, and if they’re in a similar financial situation to a first home buyer.

You’ll need to have been contributing to your KiwiSaver for a minimum of three years in order to access this grant, and the number of years you’ve contributed will impact how much is available.

If you’re buying a property with others, say a partner or a mate, you can each individually apply for a First Home Grant.

To be eligible for the First Home Grant, you must:

  • Be 18 or over
  • Be aiming to buy your first home, or be in a similar financial situation to a first home buyer
  • Have contributed 3% of your annual income, or $1,000 annually to your KiwiSaver scheme for at least three years
  • Have an income of $95,000 or less before tax from the last 12 months for an individual buyer, without dependents or
  • An income of $150,000 or less before tax from the last 12 months for an individual buyer with one or more dependents or
  • Have a combined income of $150,000 or less before tax from the last 12 months for two or more buyers regardless of the number of dependents
  • Be able to contribute a minimum deposit of 5% towards the home purchase
  • Be intending to live in the home as your primary residence
  • Commit to living in the home for at least six months from the settlement date or when the code compliance certificate is issued
  • Be purchasing an equal share in the home proportionate to the number of buyers.

More info on the First Home Grant can be found in this Kāinga Ora brochure.

*We hope this article has provided some helpful information. It's based on our experience and is not intended as a complete guide. Of course, it doesn’t consider your individual needs or situation. If you're thinking about buying or selling a property, you should always get specific advice.


Al Hall
Al Hall

Al Hall is a regular contributor at Trade Me Jobs and Trade Me Property. He’s dedicated to helping people succeed in their aspirations to find their dream job and place to live.