Use your KiwiSaver towards your home deposit for your first Australian home with First Home Super Saver Scheme (FHSSS)!

The Australia Government First Home Super Saver Scheme (FHSSS) – lets you withdraw some of your KiwiSaver to help buy your first Australian home.

Yes, you read right… There is quite a history with this, but once again New Zealanders moving to Australia can transfer their KiwiSaver to Australia and use some of it as a deposit for their first home. You must meet the criteria the ATO set and ensure you set up the right account with the right super fund provider.

If you move to Australia, and transfer your KiwiSaver to either First Super or TelstraSuper, you can then withdraw $15,000 (max $50,000, but generaly $15,000) to help with the purchase of your first home in Australia. Properties in New Zealand are not taken into consideration.

Please note, not all super providers allow you to do this, so please register with either TelstraSuper or First Super and make sure you sign up for the correct super package.

You must follow the below process to use your KiwiSaver to help you into the Australian property market:

• Move to Australia and obtain a Tax File NUmber (TFN)
• Select a super fund provider that has an FHSS scheme, setup an FHSSS account and transfer your KiwiSaver
• Apply to the ATO for an FHSSS determination and a release
• Go house hunting and find your dreamhome
• You have 12 months to find a home, but if you don’t find a home in this time, go back to the ATO and they will advise you where to from here or grant you an extension.

In most cases, once you sign a contract to purchase any property, you can no longer request a FHSSS determination, therefore you can not use your KiwiSaver in Australia to buy property.

You have 12 months (or other period allowed) from the date you requested a release. However, the ATO will automatically grant you an extension of another 12 months. You can also change your mind, and recontribute an amount into your super fund. Or you can keep it and pay 20% tax.

All the above is gone into greater detail below.

The ATO says, ‘If you transfer an amount into an Australian super fund from a KiwiSaver scheme, the amount will be an eligible contribution (except for certain amounts)’.  You are not required to be an Australian citizen, Australian resident or an Australian resident for taxation purposes for the FHSS.

Find out below what the ‘certain amounts’ are, what super fund provider you need to register with, what you need to know about the First Home Super Saver Scheme (FHSSS), the KiwiSaver to super fund transfer process and how to withdraw $15,000 to use as your first home deposit in Australia.

Withdrawing your KiwiSaver when moving overseas (excluding Australia)

If you are moving to another country apart from Australia and want to withdraw your KiwiSaver savings because you have emigrated permanently, you are able to do so. At least 12 months need to have passed since your permanent emigration from New Zealand.

You’re able to withdraw all your KiwiSaver savings, excluding any NZ Government contributions you’ve received and any funds you had transferred from an Australian-complying superannuation fund.

If your withdrawal request is approved, your Government contributions will be repaid to the Government before your KiwiSaver account is closed.

Moving to Australia and want to withdraw your KiwiSaver?

If you’re moving to Australia, unfortunately, you are unable to request an early withdrawal of your KiwiSaver savings. You can transfer your KiwiSaver savings to an Australian-complying superannuation scheme that is willing to accept the transfer and is regulated by the Australian Prudential Regulation Authority (APRA). Or you can leave your KiwiSaver savings invested in your KiwiSaver Scheme account.

Looking at buying a home in Australia?

Read my Buying a house in Australia post to learn everything you need to know about buying your new home in Australia and some smart tips to avoid paying more than you need to in fees and charges.

In this post you will find information on:

• Can my KiwiSaver be used in Australia?
• Can I use my KiwiSaver to buy a house overseas?
• Benefits of transferring your KiwiSaver to Australia
• KiwiSaver transfer process
• How to withdraw money for your home deposit in Australia.
• What are the ATO’s criteria?
• What is the First Home Super Saver Scheme (FHSSS)?
• Australian superannuation contributions and the FHSSS
• What KiwiSaver payments are considered voluntary contributions?
• Who is eligible for the FHSSS?
• Advantages and disadvantages of the FHSSS
• Which Super Fund?
• Why First Super?
• Why TelstraSuper? 

Can my KiwiSaver be used in Australia?

Yes, you can transfer your KiwiSaver to an Australian superannuation fund, and it can be used in retirement as if you earned it in Australia. You can also use it to purchase your first Australian home. Read on… 

Can I use my KiwiSaver to buy a house overseas?

Yes, you can use a certain amount of your KiwiSaver to buy your first home in Australia, as long as you follow the below process and transfer it into the correct super fund. 

Benefits of transferring your KiwiSaver to Australia

If you are living and working in Australia but still have a KiwiSaver account in NZ, you may want to transfer your money to an Australian super fund that accepts KiwiSaver amounts to save on fees and taxes.

If you’re about to become a non-resident of New Zealand for tax purposes (‘officially’ moved to Australia!) or are already living in Australia, you will be taxed at a rate of 28% on the investment earnings in your KiwiSaver each year. 

KiwiSaver transfer process

How to transfer your KiwiSaver

First, you have to set up an account with your chosen super provider:

• Join First Super online
• Join TelstraSuper

To transfer your KiwiSaver to your super fund, you must:

• be (or become) a member
• have an Australian Tax File Number (TFN)
• provide your home address in Australia
• transfer your whole KiwiSaver balance
• tell your New Zealand KiwiSaver fund you want to transfer your KiwiSaver to Australia. You will need to complete their KiwiSaver transfer form and fulfil any of the fund’s requirements
• send the completed transfer form to your super provider.

You will get confirmation of your transfer once the funds have been received from your New Zealand fund (which can take up to 4 weeks).  

How to withdraw money for your home deposit in Australia

You can only request a release under the FHSSS once. It may take between 15 and 20 business days for you to receive your money. You should consider this timing when you start your home-buying activities. You can make your release request within 14 days of signing a property contract.

When you are ready to receive your FHSSS amounts, you need to apply to the ATO for an FHSSS determination and a release.

You must have an FHSSS determination before you sign a contract to purchase any property that results in you obtaining an interest in that property. This includes contracts to purchase vacant land. In most cases, once you sign a contract to purchase any property, you are no longer eligible to request a FHSSS determination. For more information, refer to GN 2018/1.

Requesting a determination

To withdraw your voluntary super contributions under the FHSSS, you need to request an FHSSS determination from the ATO:

• log in to ATO online services through myGovExternal Link
• Go to the Super drop-down menu, select Manage, and then select First Home Saver.

When you apply for an FHSS determination, the ATO will tell you your maximum FHSSS release amount.

Receiving your amount

After you have made a valid release request, the ATO will issue a release authority to your super fund(s) requesting they send your FHSS release amounts to the ATO. Before they send the balance of the released amount to you, the ATO will:

• withhold the appropriate amount of tax
• offset the remaining amount against any outstanding Commonwealth debts.

In most cases, it will take between 15 and 25 business days for your fund (First Super) to release your money and for the ATO to pay it to you.

A payment summary will be sent to you at the end of the financial year. It will show your assessable FHSS released amount, which is comprised of:

• concessional contributions
• associated earnings on both concessional and non-concessional contributions.

You need to include this amount in your tax return for the financial year you request the release. The tax payable on this assessable amount will receive a 30% tax offset.

After your FHSSS amounts have been released

Once your savings have been released, you have up to 12 months (or other period allowed) from the date you requested the release of FHSSS amounts to sign a contract to purchase or construct a home.

The contract you enter into must be for residential premises in Australia. It cannot be any of the following types of property:

• any premises not capable of being occupied as a residence
• a houseboat
• a motor home
• vacant land (see note).

Note: If you purchase vacant land to build a home on, the contract to construct your home must be entered into to meet the FHSSS requirements. The contract to construct that home must be entered into within 12 months (or other period allowed) from the date you requested a release. In this situation, you must not have purchased the vacant land before applying for an FHSSS determination.

You must genuinely intend to occupy the property as a home and demonstrate this by:

• occupying or intending to occupy the property as soon as practicable after the purchase
• occupying or intending to occupy the property for at least 6 of the first 12 months from when it is practicable to occupy it.

If you do not sign a contract to purchase or construct a home within 12 months from the date you requested a release:

• the ATO will grant you an extension of time to do so for a further 12 months. There is no need to apply for this extension; it will be automatically granted to you, and they will notify you of this or
• you can recontribute an amount into your super fund(s). This amount must be a non-concessional contribution and be at least equal to your assessable FHSSS released amount, less any tax withheld. This amount is stated in your payment summary and may be less than the total amounts released to you, or
• you can keep the released amount and be subject to FHSSS tax. This is a flat tax equal to 20% of your assessable FHSSS released amounts and not the total amount released.

Notification requirements

If you sign a contract to purchase or construct your home you must notify the ATO within 28 days of signing the contract. If you recontribute the assessable FHSSS amount (less tax withheld) into your super fund, you must notify the ATO within 12 months of the date you request the release of your FHSSS money.

If you don’t notify the ATO that you have done one of the above or you choose to keep the FHSSS amount, you may be subject to the FHSSS tax:

• you can notify the ATO by logging into ATO online services through myGovExternal Link
• go to the Super drop-down menu, select Manage, then select First Home Saver. 

What are the ATO’s criteria?

There are certain amounts you cannot use towards the FHSSS. You cannot use amounts transferred from a KiwiSaver scheme that are Australian-sourced amounts or return New Zealand-sourced amounts.

• Australian sourced amounts: These are contributions made to an Australian super fund whilst you have been working in Australia. If you have transferred these funds to a KiwiSaver account and then transferred your KiwiSaver back to Australia, the Australian-sourced funds are not eligible for the FHS.
• Returning New Zealand sourced amounts: These are funds that have been transferred to an Australian super fund and then transferred back to a KiwiSaver account. If you transfer the KiwiSaver funds to an Australian super fund a second time, these funds are not eligible for the FHSSS.

So, you should be fine if you haven’t been transferring your KiwiSaver/Super between NZ and Australia!

 

What is the First Home Super Saver Scheme (FHSSS)?

The First Home Super Saver Scheme (FHSSS) allows people to save money for their first home inside their super fund.

From 1 July 2017, Australians were able to make voluntary concessional (before-tax) and voluntary non-concessional (after-tax) contributions into their super fund to save for their first home.

From 1 July 2018, they could apply to release their voluntary contributions and associated earnings to help purchase their first home. They would have to meet the eligibility requirements to apply for the release of these amounts.

You can use this scheme if you are living and working in Australia, are a first home buyer, and both of the following apply:

• You will occupy the premises you buy or intend to as soon as practicable.
• You intend to occupy the property for at least 6 months within the first 12 months you own it after it is practical to move in.

You can apply to have a maximum of $15,000 of your voluntary contributions from any one financial year included in your eligible contributions to be released under the FHSSS, up to a total of $50,000 contributions across all years. You will also receive a number of earnings that relate to those contributions.

Important things to know

There are a number of important things you need to know if you plan to use the FHSSS:

• First home super saver – the essentials factsheet (PDF, 404KB)This link will download a file
• Contributions and determinations
• Release requests
• Other things to know

Read more about FHSSS on the Australian Government ATO’s website, on First Super’s website, or on TelstraSuper’s website.

Australian superannuation contributions and the FHSSS

In Australia, only voluntary contributions (before or after tax) made by you to your super fund, or transferred KiwiSaver funds, can be used as part of the FHSSS.

The maximum voluntary contribution you can put towards the FHSSS is $15,000 in any one financial year. The total amount you are allowed to contribute is $50,000 per person.

If you are buying a house with a partner, together you can withdraw up to $100,000 before tax in voluntary contributions.

Types of contributions that cannot be used towards FHSSS

You cannot use contributions made, whether earnt in NZ or Australia:

• by your employer
• your spouse or anyone else on your behalf

The ATO makes it clear that if you include these amounts in your FHSSS application, your request will be cancelled, and you will not be eligible to apply for the FHSSS in the future. 

What KiwiSaver payments are considered voluntary contributions?

The ATO determines what and how much of the KiwiSaver funds are eligible for release. The ATO legal database, section GN 2018/1 provides guidance on what they consider eligible contributions for release under the FHSS. In particular, the below contributions are not eligible:

• super guarantee (SG) contributions made by your employer
• mandated employer or member contributions made for you under an award, industrial agreement
• member contributions made for you by your spouse, parent or other friends or family
• amounts you receive under a contributions-splitting arrangement
• government co-contributions
• contributions under a structured settlement or personal injury order
• amounts contributed to super as part of the small business CGT concessions
• amounts transferred from a KiwiSaver scheme that are Australian-sourced amounts or returning New Zealand-sourced amounts
• applicable fund earnings from a foreign fund transfer that you elect to include in the receiving fund’s assessable income (see Tax Treatment of transfers from foreign super funds)
• amounts that are COVID-19 early release of super re-contributions.

The key word above to be aware of is ‘mandated’, and the ATO’s interpretation of this.  KiwiSaver funds are not mandated in NZ, and NZ does not have industrial or award employment contracts, only collective or individual employment agreements.  Hence, the ATO has the last call on what they determine as ‘mandated funds’.

Here is a quick overview of the contribution differences between both countries:

New Zealand KiwiSaver	Australian Superannuation
Employee Contributions via employer	Concessional/pre-tax contributions
These are directed straight from a person’s before-tax pay to the IRD. They can choose from either 3%, 4%, 6%, 8% or 10%. If you do not decide, your employer will default to 3%	Government-mandated contributions.   Currently, in FY23, 10.5% of a person’s pre-tax income.
Employer Contributions via employer	Non-concessional / post-tax contributions
Depending on your employment contract, your employer may meet your elected contribution percentage; otherwise, they need to contribute at least 3% to your KiwiSaver (unless the employer is already contributing to another type of in-house/retirement scheme).	Voluntary contributions are contributions a person can choose to make to their super fund. The amount of contributions is limited.
Voluntary Contributions	Government co-contribution & LISTO
Voluntary amounts a person makes directly to their KiwiSaver provider.	If you are on a lower income, the government offers incentives to contribute into your super and towards retirement in the form of a co-contribution and low-income super tax offset.
Government Contributions
If a person voluntarily contributes to KiwiSaver, the government will contribute up to a maximum of $521.43. To get this, a person will need to contribute up to $1042.86 voluntarily each year. The government will still contribute 50 cents for every dollar made if this full amount isn’t contributed.

Who is eligible for the FHSSS?

You must be 18 years old or older for the FHSSS, along with all the below criteria:

• you must never have owned property in Australia before – this includes an investment property, vacant land, commercial property, a lease of land in Australia, or a company title interest in land in Australia
• you can’t have accessed the FHSSS before
• you should be aware, there are different rules for those who have suffered from financial hardship

According to the ATO, you do not need to be an Australian citizen or resident for taxation purposes. If you hold a permanent resident visa or an SCV, you can use the FHSSS as long as you meet the eligibility requirements.

Advantages and disadvantages of the FHSSS

Advantages of the FHSSS are:

• With bank interest saving rates currently so low, using your super to save for your first home deposit will help you achieve your goal faster.
• By making extra contributions, you may pay less tax and could get a higher return on your money.

The downside of the FHSSS is:

• The ATO is responsible for setting and applying the rules for the FHSSS. They decide who is eligible for the scheme and who isn’t, so it’s important you know the rules.
• First Super or TelstraSuper can only release money under the FHSSS when instructed by the ATO.
• Saving money for a deposit can take time. If you change your mind or are unable to purchase your first home, the money you save in your super account cannot be withdrawn. It will stay in your super account as part of your retirement savings until you reach your perseveration age. 

Which Super Fund?

If you are a New Zealander moving to Australia and want to use your KiwiSaver savings towards a home deposit, then the below two super providers can help you.

First Super and TelstraSuper are two of only a few Australian super funds that accept KiwiSaver Transfers.

It’s really important that you spend some time researching which super provider best suits your requirements, including reading independent reviews.

First Super has 3.8 stars from 22 Google reviews (28 May 2024), whereas First Super has no reviews on Product Review.

TelstraSuper has no Google reviews but has 4.4 stars from 133 reviews on Product Review (28 May 2024).

You can read more about them both below…

 

Why First Super?

First Super is an industry super fund. That means they are run only to benefit their members.

Everyone at First Super wants you to enjoy your retirement, but they also want you to enjoy today. To them, being a super fund is more than just what happens when you stop working:

• They give you the flexibility to choose across a range of diverse investments for your super
• They offer low fees – including zero entry fees and no increased fees if you change or leave your current employment
• They offer low-cost insurance options to protect you and your family
• They make it easy to roll over your super into a single account, saving you fees and time
• They offer Financial Advice to help you plan for now and also for your retirement.

Of course, everyone has different needs. Your individual circumstances will determine how you will benefit most from First Super.

First Super’s post on KiwiSaver and First Home Super Saver (FHSS) is here. 

Why TelstraSuper?

It’s simple, really. They’re a leading profit-to-member super fund. Everything they do is for their members – full stop. Every day, they aim to build a financially secure future for you so we can help you have a more comfortable retirement. Here are 6 ways they do this:

• Competitive Fees – they aim to keep their fees as low as possible so more profits can go to you.
• Simple advice on your super – super can be complex. Speak to their Member Services teams for information that’s easily delivered at no additional cost to you.
• Profits back to you – fund profits are for you, their members, not shareholders. Isn’t that a much smarter way to build wealth for members’ retirement?
• When they win, you win—for the past 18 years, SuperRatings has ranked them one of the top Australian funds, awarding them a platinum rating and a cabinet full of super awards.
• Strong long-term performance – their diversified investments are strong performers over the long term, which could mean more money for you in retirement.
• Responsible Investors – they care about your future – they consider environmental, social and governance factors when making investments.

Here are two of TelstraSuper’s posts worth reading, transferring your KiwiSaver across the Tasman and First Home Super Saver scheme.

 

For more information

For more information about the FHSSS refer to GN 2018/1 or First Home Super Saver – the essentials factsheet or read First Super’s information factsheet on FHSSS.

You might also be interested in…

The below posts might interest you:

• Australian Mortgage
• Australian Tax
• Find a House to Buy or Rent in Australia

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