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First home withdrawal only available for New Zealand homes

2015 amendment to rules relating to KiwiSaver clarify that withdrawals can only be made for the purchase of estates in land located in NZ.

Schedule 1 of the KiwiSaver Act 2006, clause 8(3)

The first home withdrawal rules were previously silent on where a house could be bought. The only New Zealand-based restriction was a requirement that a member's funds were paid to a practitioner who holds a New Zealand practising certificate.

The new rules make it clear that the withdrawal can only be made for the purchase of an estate in land located in New Zealand.


Providers interpreted the previous rules inconsistently, with some approving withdrawals for a first home overseas while others declined them. The member tax credit changes introduced by the Taxation (KiwiSaver HomeStart and Remedial Matters) Bill 2014 increased the importance of clarifying this rule. If the member tax credit could be withdrawn for a home overseas, this would have created an opportunity for permanent migrants who would otherwise not be entitled to withdraw the member tax credit.

By limiting the first home withdrawal to purchases in New Zealand, the new rules minimise the complexity and costs associated with monitoring transactions in overseas jurisdictions. They also reduce the risk of misuse of the early withdrawal provision since providers have familiarity with New Zealand sale and purchase documents.

Key feature

Under clause 8(3) of Schedule 1 of the KiwiSaver Act 2006, home withdrawals can only be made for the purposes of purchasing a first home in New Zealand.

Application date

The amendment came into force for first home withdrawal applications made on and after 1 April 2015.