Uncover the complexities of using your KiwiSaver for your parents' home purchase. Learn about eligibility criteria, restrictions and steps to take to explore your own eligibility.
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“My parents want to buy a new house to live in, after selling their current one in 10+ years time. They own one house, but have bought two before the current one.
They’ve suggested I use my kiwisaver to help them purchase the new house and come live with them. It would be my first home purchase, but not their first one.
I haven’t started contributing to kiwisaver yet. What I don’t want is to contribute a lot into it with the plan of using it to help them buy a house, and then being unable to due to ‘whatever reasons’.
They’d be buying it in their name, and I reread something about needing to submit an application to withdraw kiwisaver early that said it needed to be in my name etc.
I just don’t want to be putting money into a hole that’ll only become available when I’m 65. Especially since I don’t think I’ll be able to afford a mortgage any time in the future. But if my parents are 40-60k off buying a property, then I might be able to help.
I can’t invest in anything except for kiwisaver due to $8100 being the limit you can have before losing the accommodation supplement, which would then erode that amount until I was eligible again and create a ridiculous situation. I can only work part time, permanently. I already have the maximum I can invested. I really want to invest and save and be responsible, but the rules prevent this. I can not legally save it, except in kiwisaver.
I’ve seen ‘tenants in common’ or something like that mentioned, and that it’d need an extra lawyer. I wonder if that expense would take too much of a chunk out of my contribution to be worth it.
I could lower my standard of living significantly if it would make all the difference in a decade, but it is not worth doing so if I won’t be able to help them buy the house in 10 years time.
It is so long because I am not able to make it shorter. May God have mercy on my soul for the excessive length of this post. Thank you for any advice.”
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Hello! I understand you are considering using your KiwiSaver to help your parents purchase a new house. However, there are some complications with your specific case that you need to consider.
Firstly, it’s important to note that you can only withdraw your KiwiSaver funds to purchase your first home. Since your parents have already owned homes before, it is complicated the possibility that you would be able to use your KiwiSaver to help them purchase a new house. To be eligible to withdraw on the case that it’s your first home, the house must also have your name on the title.
Secondly, if you decide to use your KiwiSaver for a first-home purchase, you will need to meet certain eligibility criteria. You must have been a member of KiwiSaver for at least three years and intend to live in the property as your primary residence for at least one year. If the property cost less than the regional price cap you may be eligible for extra funds. Look into the First Home Grant and the First Home Loan.
Consult with a financial advisor or a lawyer who specializes in property and estate planning (Not your parents’ lawyer). They can provide independent, personalized guidance based on your unique circumstances and goals.
Hope this helps.
Regards, Clive Fernandes (Financial Adviser)
Director – National Capital
Disclosure: I am the director of National Capital, a KiwiSaver advice firm. The views expressed in this article are the views of the author. The information provided is of a general nature and is not intended to be personalised financial advice. You may seek appropriate financial advice from a Financial Adviser to suit your individual circumstances or contact National Capital.
