First-home buyers petition Parliament
Returning Kiwis say the Government’s failure to negotiate a new pensions transfer treaty with Australia prevents them from using their Super savings to buy a first home.
Although it has been possible for over a decade to withdraw money from KiwiSaver to help buy a first home, Australia only followed suit with its super schemes in 2017.
But when Australia made the move, the pensions portability agreement with New Zealand was not renegotiated to allow New Zealanders returning home and transferring their savings into KiwiSaver to withdraw their Australian savings to help fund a house deposit.
Trainee early childhood teacher Jade Rihari said she and her partner had found themselves trapped out of the Tauranga property market as a result, despite having money for a deposit in KiwiSaver.
Rihari said the couple appealed to the Government for help, but got nowhere, and became so frustrated they launched an online petition to urge MPs to renegotiate the rules with Australia.
She said returning New Zealanders were the only super savers in Australia and New Zealand to be unable to access portions of those savings to buy a first home.
‘‘It’s not allowing us to be first-home buyers. A lot of people returning to New Zealand are in the same boat,’’ she said.
So far, the petition has gathered just over 400 signatures, mostly from returning New Zealanders shocked at the lopsided rules, which would allow them to tap their savings for a deposit, if they stayed in Australia, and buy a home there.
One of those who signed the petition was Wellington healthcare worker, and sole parent, Ludwig Von dem Bongart.
‘‘If I can use my Australian super that I have brought over and sits in my KiwiSaver, I can buy a house and provide a safety net for my boys as I am a single parent,’’ he said.
‘‘It means nothing, and would cause no difference to the New Zealand Government, but it would give me a fighting opportunity to provide a home for my boys.’’
Like Rihari, he contacted ministers appealing for action, but got a similarly discouraging response.
Rihari said the Covid-19 pandemic had prompted many overseas Kiwis to return to the safety of their homeland, and called for them to have a fair chance of setting up home here.
‘‘With many returning back to New Zealand from Australia, I see the need for these funds to be available to first-home buyers to purchase or build a home in New Zealand,’’ she told MPs in the petition submission.
‘‘I feel our Government should pay attention to this.’’
The couple had checked with their bank in New Zealand before shifting the money into KiwiSaver, believing they could use it as a deposit on a first home, Rihari said.
David Parker, associate minister of finance, said there were differences between the Australian first-home withdrawal rules, and those of KiwiSaver.
In Australia, for example, people withdrawing money from a super fund to buy a first home could face an exit tax, which could not be applied on money sent across to KiwiSaver and then withdrawn to buy a first home.
‘‘Before it would be possible to consider allowing Australian superannuation savings transferred to a KiwiSaver account to be withdrawn for the purchase of a first home in New Zealand, issues relating to how the unique features of the Australian first home withdrawal rules could be maintained in New Zealand need to be addressed,’’ Parker said.
‘‘Any change would require law changes on both sides of the Tasman.’’
But there were no current plans to do so.
Last year returning New Zealander David Craig called on the Government to press for change, calling the law ‘‘stupid’’.
‘‘We’re locked out of the market because of a stupid law,’’ said Craig, a warehouse supervisor, who has spent much of the past decade out of the workforce and raising his children, both of whom have special needs. His wife, Carol Craig, is a healthcare worker.