A purchaser's agreement is unconditional and they are using a KiwiSaver first-home withdrawal. They ask the salesperson whether the KiwiSaver money can be paid to the agency as the deposit. How are approved first-home withdrawal funds paid?
Correct Answer
C) The provider pays them to the buyer's lawyer on or before settlement day.
Kāinga Ora explains that the withdrawal is administered by the KiwiSaver provider or complying fund manager and, if approved, paid to the member's solicitor on or before settlement day. A buyer needing a deposit on signing usually has to fund it another way. The salesperson should point the buyer to their provider and lawyer early.
Why This Is the Correct Answer
Approved withdrawals go from the provider to the buyer's solicitor for settlement.
Why the Other Options Are Wrong
Option A: The provider pays them into the agency's trust account as the deposit.
Kāinga Ora says approved withdrawal funds are paid to the buyer's solicitor on or before settlement day.
Option B: Inland Revenue pays them into the buyer's bank account within 10 working days.
The provider administers the withdrawal and pays the solicitor; Inland Revenue does not pay it to the buyer.
Option D: Kāinga Ora pays them directly to the vendor when the agreement becomes unconditional.
Kāinga Ora does not pay the vendor; it is the provider that releases funds, and they go to the lawyer.
Background Knowledge for Finance
Source: https://kaingaora.govt.nz/en_NZ/home-ownership/kiwisaver-first-home-withdrawal/
Exam Tip for Finance
Plan the deposit around KiwiSaver timing: the money goes to the lawyer, not the agent.
Common Mistakes to Avoid on Finance Questions
- •Promising a vendor that KiwiSaver funds will arrive as the agreement deposit.
More Finance Questions
What is the current standard LVR (Loan-to-Value Ratio) restriction for owner-occupier residential property purchases in New Zealand?
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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