Leasehold estate for first home withdrawal

Background

Clause 8, schedule 1 of the KiwiSaver Act 2006 allows members of KiwiSaver to withdraw their accumulated savings, less the one-off $1,000 kick-start Crown contribution and any member tax credits, to use for the purchase of a first home. A KiwiSaver member cannot withdraw their savings for a first home if they have previously held an estate in land, unless their financial position is what would be expected of a first home buyer.

Previously in clause 8, the definition of an estate included a "leasehold estate". A leasehold estate includes leasehold residential tenancies where a property owner rents the property to another party. Using that definition, a member who had ever been party to a rental lease agreement may not have been eligible for first home withdrawal.

Those people should not have been excluded from meeting the eligibility requirements for this reason only.

Key features

An amendment to clause 8, schedule 1 now ensures that individuals with an interest or past interest in a leasehold estate, such as a residential tenancy, are not excluded from first home withdrawal.

It also ensures that individuals with an interest in a leasehold estate may be eligible to receive the KiwiSaver deposit subsidy.

Application date

The amendment applies from 1 July 2010.