Can I Use My KiwiSaver for a First Home? The Rules Buyers Get Wrong

Every lender works this out differently. Treat it as a guide, not a guarantee.

KiwiSaver is where most first home deposits come from. It’s also behind a lot of last-minute stress, usually because of a rule nobody mentioned until the lawyer asked about it. Here are the rules, then the mistakes I see most often.

The rules in plain English

• You’ve been a KiwiSaver member for at least three years.
• You’re buying a home you intend to live in, or land to build a home you’ll live in.
• You don’t own a home or land now, and you haven’t made a first home withdrawal before. It’s once per person.
• You leave at least $1,000 in your account.
• Funds transferred from an Australian super scheme can’t be withdrawn, though the returns on them can.

If you’ve owned property before, you may still qualify. That’s the first mistake below.

Thinking owning land doesn’t count

This catches more people than any other rule. An inherited section. A share in Māori land gifted decades ago. A small block with your name on the title that you’ve never visited. Any of those can block a standard withdrawal, however little it’s worth and however many other owners there are. (Māori land interests are treated differently, so check before you assume the worst.)

There’s a way through. Kāinga Ora can decide that someone who owns, or used to own, property is in the same financial position as a first home buyer. The test looks at your assets, not your income. Roughly, your realisable assets need to be no more than 20% of the house price cap for an existing home in the area you’re buying. Decisions usually take about 10 working days, and it’s a separate application, so start it well before you’re bidding on anything.

Assuming it can only be used at settlement

Most people use their KiwiSaver at settlement, and that’s the simplest route. But it can go towards the deposit before you’re unconditional, as long as the deposit is held by a stakeholder, usually a lawyer’s or agent’s trust account, until settlement.

The exception is auctions. An auction contract is unconditional the moment the hammer falls, so KiwiSaver can’t be used for an auction deposit. If you’re bidding, you need the deposit in cash. Agree how the deposit will be paid with your lawyer before you sign anything.

Leaving the paperwork too late

Your lawyer completes and certifies part of the application, and they need the signed sale and purchase agreement to do it. Most providers then want about 10 working days to process it. Some take longer, particularly if you’ve lived overseas. Start the day your agreement is signed, not the week before settlement.

The rule that hurts if you miss it: you can’t withdraw after settlement. Once you own the home, you’re no longer eligible. If the money isn’t there in time, you can’t claim it afterwards, so a slow provider becomes your lawyer’s problem on settlement day. Tell your lawyer the moment anything looks like it’s running late.

Counting on it for costs it can’t pay

The bottom half of that table matters more than people think. If every dollar you have is in KiwiSaver, you still need cash for the builder’s report, the LIM and your lawyer. Budget a few thousand dollars outside KiwiSaver.

Mixing up KiwiSaver and the First Home Loan

They’re separate tests. You can qualify for one and not the other.

The Kāinga Ora First Home Loan lets you buy with a 5% deposit through lenders including ASB, Westpac, Kiwibank, the Co-operative Bank, SBS and others. Its income caps, before tax, are:

• under $95,000 for a single buyer without dependants
• under $150,000 for a single buyer with dependants
• under $150,000 combined for two or more buyers

It also comes with a 1.2% insurance premium on the loan. The KiwiSaver withdrawal has no income test at all. I explain how the two fit together in 5% deposit home loans.

One more thing to cross off the list: the First Home Grant closed to new applications in May 2024. If an older article mentions it, it’s out of date.

KiwiSaver changes that affect your deposit

• From 1 July 2025, the government contribution dropped to 25 cents for every dollar you put in, up to $260.72 a year. To get the full amount you need to contribute about $1,043 between 1 July and 30 June. If you earn over $180,000, you don’t get it.
• From 1 April 2026, the default contribution rate went up to 3.5% for both you and your employer. It goes to 4% from 1 April 2028.

If you’re buying in the next year or two, the higher default rate helps a little. It’s worth logging into your provider’s app and checking the balance you can withdraw, not just the total.

Common questions

Where these rules come from

Checked on 9 October 2026. Rules and caps change, so check the current position at the source.

• Inland Revenue, getting your KiwiSaver for your first home
• Kāinga Ora, KiwiSaver first home withdrawal for previous home owners
• Kāinga Ora, First Home Loan brochure
• Inland Revenue, KiwiSaver changes from 2025

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This article is general information only and isn’t personalised financial advice. It doesn’t take account of your objectives, financial situation or needs, figures are indicative, and all lending is subject to each lender’s criteria. Mortgage Sense is a trading name of Yatin Kainth, a Financial Adviser (FSP1007497) providing advice under the Mortgage Managers licence (North West Group Holdings Ltd, FSP682791). Read our Disclosure Statement, fees and how we are paid, how to make a complaint and Privacy Policy.