As we approach the third anniversary of KiwiSaver, many New Zealanders will be thinking about the tax free government housing subsidy available from 1 July 2010 – just one of the many benefits of KiwiSaver. In addition, members will be able to apply to withdraw their contributions to buy a first home or purchase land to build a first home. So, how does it work?
First home deposit subsidy
After 3 years of contributing at least 2% of their income to KiwiSaver, members will be able to apply for a one-off grant* of $1,000 for each year they’ve contributed to KiwiSaver. The subsidy increases by $1,000 per year up to $5,000. So, if they successfully apply for the subsidy after 5 years of contributing to KiwiSaver, they will receive $5,000. Eligible couples can also combine their subsidies up to $10,000.
First home withdrawal
After 3 years of being invested in KiwiSaver, members will be able to withdraw their own contributions and their employer’s contributions for a home deposit (excluding the $1,000 kick start and Member Tax Credits). It must be their first home not an investment property. There is no minimum contribution amount to be eligible for the first home withdrawal. And for those second home buyers, they may still be eligible to withdraw their contributions if they’re in the same financial position as a first home buyer.
If members are eligible for this fantastic offer, they’ll stay a member of KiwiSaver and continue to grow their savings while taking advantage of the scheme’s other great benefits.
* Income, house caps and other eligibility criteria apply.
Contact Thorners if you need any advice on KiwiSaver.