I bought a rental property four years ago through an LAQC. My trust then bought my own residential home 18 months ago. These are the only two properties I have ever had a connection with.
I have been contributing to KiwiSaver for nine months.
Given that I haven't bought a house in my own name, am I entitled to all the benefits available to first-home buyers if I were to purchase one in my own name?
Mary Holm: Something tells me that you are not quite the person the government had in mind for the KiwiSaver first-home assistance. But do you qualify anyway?
First, as stated above, you need to have been in KiwiSaver for at least three years before you can withdraw money to buy your first home. And for the subsidy, you need to meet the requirements for contribution level, income and house price.
Assuming that in a couple of years' time you do qualify in all of those ways, where do you stand?
Conversations with Housing NZ and a provider reveal that this is a bit of a grey area.
Let's start with the LAQC, or loss attributing qualifying company. "Ownership of shares in a company that owns land will not affect an individual's eligibility for the deposit subsidy," says Housing NZ. Sounds promising.
The provider goes along with this to some extent. If you owned shares in, say, Kiwi Income Property Trust, that wouldn't affect a withdrawal from KiwiSaver for a first home.
"But in my opinion LAQCs would always be caught," he says. "I can't see that he could argue that he hasn't owned an estate in land," which is the acid test here.
Hmm. Not so promising after all. Anyway, let's move on and look at the trust.
Says Housing NZ: "The purpose of the subsidy is to help people buy and live in their first home." But you are effectively already doing that, in the house the trust bought for you. So, on those grounds, it's unlikely you would qualify for the subsidy.
In both conversations, however, the experts came up with possible scenarios under which somebody with a trust, or possibly even an LAQC, might still be able to get KiwiSaver first-home assistance. It might depend, for example, on the number of trustees or shareholders, or whether you are the beneficiary of a trust that has been in existence for several generations.
You might also find a more obliging KiwiSaver provider than the one I spoke to. Note, though, that the Government Actuary is keeping an eye on how many early withdrawals providers permit, so you probably won't come across anyone who is extremely lax.
It's worth also keeping the whole thing in perspective. The first-home withdrawal is merely moving your own money from one place to another. If you can't do it, you'll have more money saved for retirement.
And the subsidy is worth a maximum of $5000 per person. Nice - but it sounds as if you can get by without it.
Mary Holm is the author of bestselling books on KiwiSaver and personal finance. She is also a highly praised seminar presenter. Her written advice is of a general nature, and she is not responsible for any loss that any reader may suffer from following that advice.
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