If you’re buying your first home, you may be able to use KiwiSaver savings and get a government subsidy.

A The government provides $1000 lump sum when you join KiwiSaver, plus tax credits of up to $1040 a year.

B The cap is currently $400,000 for higher priced areas such as Auckland city and $300,000 for the rest of New Zealand. This is to stop people from using the subsidy to buy homes they can't afford

How does KiwiSaver work?

KiwiSaver and home buying

KiwiSaver can be used to help you buy a home or pay off your mortgage.

Mortgage repayment

Once you've been in KiwiSaver for 12 months, you can arrange for up to half of your regular contributions to go towards paying off the mortgage on your home. This is called mortgage diversion. You can only use it for your main home - not for an investment property or holiday home.

Your employer's contributions can't be used for mortgage diversion, and you won't get the KiwiSaver tax credit on the savings you use for mortgage repayment.

Not all KiwiSaver providers are offering mortgage diversion. If you think you might like to use this option, check before you commit to a scheme.

Using your KiwiSaver savings to buy a home

Once you've been a KiwiSaver for three years, you may be able to withdraw your savings (excluding the government contributionsA ) to put towards buying your first home.

First home deposit subsidy

From 2010, once you've been contributing 4% of your pay to KiwiSaver (or another approved savings scheme) for at least three years, you may be entitled to the first home deposit subsidy of up to $5000.

To get the subsidy, you'll have to meet a household income test, buy a house that's under a certain value.B , and intend to live in the house for six months or more.

Important

Like you, we can't predict the future - which means we can't guarantee the performance of any savings scheme. Nor do we endorse any specific KiwiSaver provider or scheme. ConsumerSaver is a good starting point - but, before you commit, we strongly suggest you seek independent financial advice. See our full disclaimer.