KiwiSaver first home withdrawals: targeted changes for service tenancies and first farm purchases

The New Zealand Government has announced two targeted changes to the KiwiSaver first home withdrawal rules. These changes are intended to address issues for members who (a) live in employer-provided housing under a service tenancy, and (b) purchase a first farm through an entity structure.

 

What has been announced

The Government has announced two changes to the KiwiSaver first home withdrawal rules:

1. Service tenancies: Workers in “service tenancies” (workers who live in employer-provided housing) will be able to make a first home withdrawal to buy a home without occupying the property they buy.
2. First farm purchases: Farmers will be able to use a first home withdrawal to buy a farm through a majority-owned and controlled company, partnership, or trust – provided the farm will be their principal place of residence.

 

Current first home withdrawal rules

Under the current settings, a KiwiSaver member who has been a member of KiwiSaver or a Complying Superannuation Fund for at least three years may withdraw most of their balance for a first home purchase (leaving at least NZD1,000 and excluding any funds transferred from an Australian complying superannuation scheme) – provided that they intend to live in the property as their principal place of residence.

As a condition of withdrawal, the member’s lawyer has to give the scheme manager a copy of the sale and purchase agreement for the property showing the member as purchaser.

 

Service tenancies

The principal place of residence requirement – the “intend to live in it” rule – has meant workers who are required to live in employer-provided housing (such as some farm workers, rural teachers, clergy, and Police and Defence Force personnel) have been unable to make first home withdrawals without changing roles.

The announced change would mean those workers can make first home withdrawals to buy a property without needing to “intend to live in it”. Evidence of the member’s service tenancy will be required, likely from the employer.

 

First farm purchases

The current requirement to provide a sale and purchase agreement showing the member as purchaser has meant some farmers are unable to buy homes through a company, partnership, or trust structure, even if they intend to live on the property.

The announced change would mean farmers can make a KiwiSaver withdrawal to buy a “first farm” in the name of a company, partnership, or trust, provided that:

• the member has majority ownership or control of the entity; and
• the member intends to live on the farm as their principal place of residence.

 

What counts as “farmland”

In these rules, “farmland” will have a meaning aligned to the Overseas Investment Act 2005, covering land used principally for agricultural, horticultural, or pastoral purposes, or for keeping bees, poultry, or livestock.

• Forestry plantations will be excluded.
• Smaller forestry blocks on farms that are focused principally on other types of farming will be allowed.

 

Implications for KiwiSaver providers

Before the changes take effect, KiwiSaver providers should consider:

• Updating first home withdrawal policies, forms, and checklists to capture service tenancy evidence and to assess entity-purchased farm transactions, including majority ownership and control attestations and principal residence undertakings.
• Updating disclosure material to accurately reflect the new first home withdrawal rules.
• Preparing member-facing guidance explaining the narrow scope of the new exceptions and the continuing baseline first home criteria (membership period, minimum balance, and New Zealand property).
• Developing processes to assess service tenancy status, whether a property is a farm, and ownership or control of the entity making a first farm purchase.

 

Timing

At this stage, the changes have only been announced.

The Bill effecting the changes is expected to be introduced in mid-2026, to go before a select committee before the 2026 General Election, and to be enacted after the election – with commencement at least six months after enactment.

A related Member’s Bill, the KiwiSaver (First Home for Farm Land and Service Tenancy Tenants) Amendment Bill, will be withdrawn when the new Bill is introduced.

 

Contact

If you would like to discuss these changes, or KiwiSaver more generally, please contact one of our experts.