Are you using KiwiSaver to buy a first home?  I have just been informed of an interesting case by one of my clients that you need to be made aware of.

Under KiwiSaver you can withdraw your contributions to use it as a deposit for your first home (or similar).

A client has just told me of a friend of theirs that has the intentions of building a property that is their first home and using KiwiSaver to do so.

The story in short is that they purchased the land using their personal finances as a deposit, with the intentions of using their KiwiSaver contributions for the deposit for the build of the house.  This was under the instructions from their bank (no names…).

Once they had settled on the land they then applied to KiwiSaver to obtain the funding.

Now here’s the kicker – They were declined on the basis that this was not their ‘First Home’ as they already own property, being the vacant land.

From what I understand, they have been trying to resolve this for the last 4(ish) weeks with no avail.  It is now gone to the MP (Bill English) and management at the bank who will ‘look into it’.  Apparently this is a lapse in the way that the bill  is written and is a real problem with this situation now being used as a test case to re-write the bill.

At the moment if you are considering using KiwiSaver for a new build on your first home, just be aware that this is happening.  If you are a First Home Buyer and are interested in knowing what you can get out of your KiwiSaver contributions you can read my special KiwiSaver Goldmine Report here or check out the KiwiSaver official website