Key features
Clause 8, schedule 1 of the KiwiSaver Act 2006 allows members of KiwiSaver to withdraw their accumulated savings, less the one-off $1,000 Crown contribution and any member tax credits, to use for the purchase of a first home. A KiwiSaver member cannot withdraw his or her savings for a first home if they have previously held an estate in land, unless their financial position is what would be expected of a first home buyer.
In clause 8, the definition of an estate includes a “leasehold estate”. A leasehold estate includes leasehold residential tenancies where a property owner rents the property to another party. Using that definition, if a member has ever been party to a rental lease agreement, the person may not be eligible for first home withdrawal. These people should not be excluded from meeting the eligibility requirements for this reason only.
The amendment to clause 8, schedule 1 will ensure that individuals with an interest or past interest in a leasehold estate, such as a residential tenancy, will not be excluded from first home withdrawal.
The amendment will also ensure that individuals with an interest in a leasehold estate may be eligible to receive the KiwiSaver deposit subsidy. The deposit subsidy is provided for in the administrative rules of the Housing New Zealand Corporation rather than legislation. The administrative rules for the deposit subsidy are aligned with the first home withdrawal rules in clause 8, schedule 1 of the KiwiSaver Act 2006.