KiwiSaver is a long-term savings scheme designed to help New Zealanders save for retirement and is generally locked in until you reach age 65, but for many people, it also plays a crucial role much earlier, particularly when buying a first home.

Understanding how KiwiSaver can be used, what happens if you work overseas, and how your KiwiSaver is dealt with on death can help you avoid unexpected issues later on.

Using KiwiSaver for a First Home Deposit

If you are buying your first home, you may be able to withdraw most of your KiwiSaver savings to put towards the purchase.

In general, you can apply to withdraw:

• Your own contributions
• Employer contributions
• Investment returns
• Government contributions (with some limits – if you worked overseas during the period these were paid, they may need to be repaid to the Government

You must usually leave a minimum balance of $1,000 in your KiwiSaver account.

To qualify, you typically need to:

• Have been a member of KiwiSaver for at least three years
• Be buying your first home (or be treated as a first-home buyer)
• Intend to live in the property as your main home
• Purchase a property within relevant price caps

Applications must be made through your KiwiSaver provider, and timing is important, as funds are usually released shortly before settlement.

KiwiSaver and Death: Why a Will Is Important

KiwiSaver does not automatically pass to a spouse or partner. Instead, it becomes part of your estate when you die.

If your KiwiSaver balance is relatively small, providers may be able to release the funds without probate. However, once a KiwiSaver balance becomes significant (often around $40,000 or more, depending on the provider), probate or letters of administration are usually required before the account can be closed and funds distributed.

This means:

• Delays for your family
• Distribution of fund according to the Administration Act 1969 and not how you wish
• Additional legal costs
• More stress at an already difficult time

Having a current will in place ensures your KiwiSaver is dealt with in accordance with your wishes and can significantly streamline the process for those you leave behind.

How We Can Help

• KiwiSaver intersects with property law, estate planning, and relationship property in ways many people don’t anticipate. Our firm has a highly experienced team who can assist with:
• Advice on KiwiSaver withdrawals for first-home purchases
• Estate planning and wills, including how KiwiSaver is treated on death
• Relationship property advice where KiwiSaver is part of a separation or a contracting out agreement (pre-nup)
• Guidance for clients who have worked or lived overseas

If you would like clarity around your KiwiSaver position or want to ensure your affairs are properly structured, get in touch with us today to see how we can help.

Karleigh Hoera, Senior Associate. You can contact Karleigh here.