Kiwisaver: Can you buy first home in Australia?

'Ringfencing' provisions mean there are complicating factors around moving superannuation savings between New Zealand and Australia.

Savings scheme provider can explain requirements if you want to withdraw funds for first home across the Tasman.

If you have money in KiwiSaver and move to Australia and want to purchase your first home there (having never owned a home either side of the Tasman) can you withdraw the funds for this?

Generally speaking home buyers can dip into their funds after three years of joining KiwiSaver to buy their first home.

You can tap all of your contributions and investment returns but the $1000 kickstart and any member tax credits aren't available to use for house hunting.

But what if that first home is in Australia and not New Zealand?

I spoke with Nigel Jackson, head of investment products at Westpac, about using KiwiSaver money to buy a home across the Tasman.

"We have approved first-home withdrawal applications for purchases of properties in Australia, since it appears such purchases are not prohibited by relevant legislation," says Jackson.

"You'll need to meet the standard first-home withdrawal criteria, provide all of the necessary documents (for example, sale and purchase agreement) and ensure your solicitor is New Zealand licensed.

"If you would like to use KiwiSaver to help you buy a home in Australia, I suggest you get in touch with your KiwiSaver provider as early as possible to discuss their requirements," he says.

In the middle of last year legislation came into effect that allowed New Zealanders moving permanently to Australia to take all their KiwiSaver funds with them and combine those savings with their Australian superannuation savings.

It's not compulsory for Australian providers to accept KiwiSaver funds and in practice only a handful of smaller players are doing so at this stage.

Part of the problem is that KiwiSaver funds need to be "ring-fenced" because that KiwiSaver money won't be available to you in Australia until you hit 65 -- the New Zealand age of retirement -- five years after the Australian superannuation savings can be accessed.

Creating the systems to ring-fence KiwiSaver funds has taken Australian providers some time and comes amid a raft of changes to the superannuation industry there.

Once KiwiSaver funds are transferred to an Australian superannuation provider the Australian rules apply.

Although Australian superannuation rules have options for accessing funds early if you hit financial trouble or become seriously ill, it isn't currently possible to take superannuation money out for a first-home purchase in Australia.

Moving your KiwiSaver funds to Australia is optional, so in theory you could leave the money in New Zealand for as long as you want.

If your money is going in the opposite direction -- that is, you are combining your Australian superannuation savings into your KiwiSaver account when you move permanently back to New Zealand --then that portion of money is similarly "ring-fenced" and the Australian rules apply.

According to the IRD, "Australian-sourced retirement savings will be subject to Australian complying scheme rules, including a minimum retirement age of 60".

"These savings will also not be able to be withdrawn to purchase a first home," it says.

*Disclaimer: Information provided is stated accurately to the best of the respondent's knowledge at the time of publication. It is general in nature and should not be construed, or relied on, as a recommendation to invest in a particular financial product or class of financial product. Readers should seek independent financial advice specific to their situation before making an investment decision.

To have your KiwiSaver questions answered by the Herald's panel of industry players email Helen Twose, helentwose@gmail.com.

For more expert analysis click here.