Changes to KiwiSaver 2nd Chance Withdrawal effective from 1 July 2016…

Previously, second-chance homeowners were unable to withdraw their KiwiSaver if they exceeded the income limit of $120,000 for a couple and $80,000 for an individual.

The Government has announced that as of 1 July 2016* there will no longer be any income limits for second-chance homeowners seeking to make a withdrawal from their KiwiSaver.

The change will mean that second-chance homeowners who have low assets will be able to access their KiwiSaver funds to buy a home regardless of how high their income is.

The rest of the eligibility criteria will remain:

• You have not received a first home KiwiSaver withdrawal before, and you have been contributing to KiwiSaver for at least three years.
• You have previously owned a home, but at the time of your application NO LONGER have an interest in a property.
• Your realisable assets are less than 20 percent of the house price cap for the area you are buying in. 
• The house cap prices are as follows:

     Auckland – for existing properties $600,00 or for new properties $650,000

     Hamilton, Tauranga, Western Bay of Plenty District, Kapiti Coast District, Porirua City, Upper Hutt City, Hutt City, Wellington City, Tasmin District, Nelson City, Waimakariri District, Christchurch,             Selwyn District and Queenstown Lakes District – for existing properties $500,000 or for new properties $550,000

     The rest of New Zealand – for existing properties $400,000 or for new properties $450,000

     For example, the current house price cap in Wellington region for an existing property is $500,000, so your realisable assets would need to be under $100,000. 

If you are able to answer “Yes” to all of the above conditions, you then need to apply to Housing New Zealand for a Letter of Determination to provide to your KiwiSaver provider to prove that you are eligible for the “second chance” withdrawal. 

We strongly recommend you apply to Housing New Zealand for this Letter of Determination as soon as possible as it takes up to four weeks to obtain.  Waiting for this approval letter is the most common reason why KiwiSaver Second Chance Withdrawals get delayed.  

*Please note income thresholds and house cap prices are current as at the date of this article