First-home buyers cash in KiwiSaver

Hundreds of Dunedin residents are cashing in their KiwiSaver to plump up their deposit on a first home.

Housing New Zealand confirmed the number of Dunedin people taking advantage of subsidies available to KiwiSavers had increased substantially in the past two years.

First-home buyers, or those in the same position as a first-home buyer, can withdraw their KiwiSaver contributions and the contributions of their employer after three years.

On top of that, people in KiwiSaver for more than three years can get an extra $1000 deposit subsidy for every year they have been in the scheme, up to a maximum of $5000, from Housing New Zealand.

In the 11 months to May 31, 2013, there were 274 deposit subsidies issued in Dunedin, up from 224 in the 12 months before that and just 68 the year before.

That compares with national figures of 4488, 3163 and 1071 subsidies issued in the same periods, respectively.

Craigs Investment Partners Dunedin investment adviser Michael Milne said it was a good option for people who were trying to save a deposit for their first home.

National figures provided by Housing Minister Nick Smith and Revenue Minister Todd McClay on Sunday show the number of people withdrawing their KiwiSaver contributions had risen 700% in the past two years.

In the year to March 31, 2013, 10,733 people had withdrawn their contributions as a deposit on their first home.

Those numbers compare with 5737 for the previous financial year and 1274 in 2011.

''We want New Zealand to be a country where owning your own home is an achievable aspiration and this sevenfold increase in two years is hugely encouraging,'' Dr Smith said.

Withdrawals totalled $120.2 million in the year to March 31.

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