A buyer owned a flat ten years ago, sold it, and has never used KiwiSaver to buy a home. He has been a member for five years and now owns no property. Who decides whether he can make a first-home withdrawal as a previous home owner?
Correct Answer
D) Kāinga Ora assesses him as a previous home owner before the provider pays.
Kāinga Ora says it is only involved in the withdrawal if the member has previously owned a home or land. A previous owner applies to Kāinga Ora for a determination, and must have been a member for at least three years, not have withdrawn before, own no property now, and not hold realisable assets over the set limit. The KiwiSaver provider then administers the withdrawal.
Why This Is the Correct Answer
Previous home owners need a Kāinga Ora determination before the provider can release funds.
Why the Other Options Are Wrong
Option A: No one; anyone who has owned property before is excluded from withdrawing.
Kāinga Ora can issue a determination for previous home owners who meet its criteria, such as limited realisable assets.
Option B: Inland Revenue decides, because it collects KiwiSaver contributions.
Kāinga Ora, not Inland Revenue, makes the determination for previous home owners; the provider administers the withdrawal.
Option C: His lawyer decides, because the funds are paid to the lawyer at settlement.
The lawyer receives the funds but does not decide eligibility; Kāinga Ora's determination is required.
Background Knowledge for Finance
Source: https://kaingaora.govt.nz/en_NZ/home-ownership/kiwisaver-first-home-withdrawal/
Exam Tip for Finance
First-time buyer: go to the provider; previous owner: Kāinga Ora first, then the provider.
Common Mistakes to Avoid on Finance Questions
- •Telling a previous owner they can never use KiwiSaver for another home.
More Finance Questions
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What is a key advantage of a revolving credit mortgage facility?
When assessing a mortgage application, which factor is typically given the highest priority by New Zealand lenders?
James has been contributing to KiwiSaver for 4 years and wants to withdraw funds for his first home. His KiwiSaver balance is $45,000, but $15,000 consists of government contributions and employer matching. What is the maximum he can withdraw for his house deposit?
What is the main advantage of a table mortgage compared to an interest-only mortgage?
- → What is the maximum amount a first home buyer can withdraw from their KiwiSaver account for a house deposit?
- → What does LVR stand for in New Zealand mortgage lending?
- → What is the key difference between a table mortgage and an interest-only mortgage in terms of monthly payments?
- → A bank checks how much of a borrower's gross income would go on debt repayments. The borrower earns $80,000 a year, already pays $800 a month on other debts, and the new mortgage would cost $2,200 a month. What share of gross income would the repayments take?
- → Sarah earns $80,000 annually and wants to borrow $400,000. What is her debt-to-income ratio?
- → A property is valued at $600,000 and the buyer has a $100,000 deposit. What LVR would this loan represent?
- → Which of the following is NOT typically considered by banks when assessing lending criteria?
- → How long must a KiwiSaver member have been contributing before they can withdraw funds for their first home?
- → Which type of mortgage allows borrowers to make additional payments that can be re-borrowed later?
- → A couple with a combined income of $120,000 wants to buy their first home for $650,000. They have a 15% deposit. What is their LVR?
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