Using KiwiSaver to Build a New Home in NZ: Section, Build Contract and Code of Compliance Timing

You can use your KiwiSaver first-home withdrawal to build, not just buy. But the money moves differently for a new build. Here is when it comes out for turn-key and progress-payment contracts, what your solicitor needs to see, and the timing mistakes that delay a build.

Most people picture a KiwiSaver first-home withdrawal as a lump of deposit money that lands the day you buy an existing house. It can also fund a new build. The rules are the same, but the money moves on a different schedule, and the schedule is where new-build buyers come unstuck. This guide sets out when your KiwiSaver comes out for a build, how turn-key and progress-payment contracts differ, what your solicitor and Kāinga Ora need to see, and the timing mistakes that stall a build withdrawal.

TL;DR: You can use your KiwiSaver first-home withdrawal to build, not just buy, provided you have been a member for at least 3 years and leave $1,000 in your account. The catch is timing: on a turn-key contract the money behaves much like an existing-home purchase, but on a progress-payment build it often cannot be released until you own the land and the contract is signed. Plan the withdrawal around your build sequence, not the other way around.¹²³

Can you use KiwiSaver to build a new home in NZ?

Yes. A KiwiSaver first-home withdrawal is available for building a new home, not only for buying an existing one.³ The core eligibility tests are identical either way:

• You have been a KiwiSaver member (or in a complying superannuation fund) for at least 3 years, counted from your join date rather than your first contribution.²
• You intend to live in the home — or, for a build, on the land you build on — as your principal place of residence. It cannot be a rental or investment property.³
• You leave at least $1,000 in your account, and you cannot withdraw the original $1,000 kick-start (if you ever received it) or any funds transferred from an Australian complying super scheme.¹

You apply through your KiwiSaver provider, not through Kāinga Ora, for a genuine first home. Kāinga Ora only steps in for the "second chance" (previous home owner) pathway, where it must first determine you are in the same financial position as a first-home buyer before any withdrawal proceeds.⁵

KiwiSaver is now a very large pool of first-home money — 3,334,654 members held $111.8 billion between them as at 31 March 2024.⁴ For many people building their first home, that account is the difference between getting a project off the ground and not.

If you are still weighing build versus buy, our first-home withdrawal rules guide covers the eligibility side in full.

How is a KiwiSaver build withdrawal different from buying an existing house?

When you buy an existing house, the path is simple: you go unconditional, your solicitor verifies the documents, and your provider releases the money to the solicitor's trust account in time for a single settlement date.

A build splits that single moment into a sequence. Depending on your contract, you might own the land first, then sign a build contract, then make payments in stages as the house goes up, and only take title at the end once the Code Compliance Certificate (CCC — the council's sign-off that the work meets the building consent) is issued. KiwiSaver has to slot into that sequence somewhere, and where it slots in depends on the contract type and on what your provider will accept as evidence.

The figure below shows the two timelines side by side.

Figure: when the KiwiSaver money moves — existing home vs new build

Source: Kāinga Ora first-home withdrawal process; provider withdrawal forms.³⁵

The single most important takeaway: with an existing home the money comes out before settlement; with a build it may come out at land settlement, at the build contract, or only at the end, depending on how the contract is structured.

When does the money come out — at the build contract, progress payments or settlement?

This is the question that decides your whole timeline, and the honest answer is that it depends on your contract and your provider. Three broad patterns cover most builds.

The common thread is that your KiwiSaver money is released to your solicitor's trust account, not to you and not directly to the builder. Your solicitor then applies it where the contract requires — to the land, the deposit, or a progress claim.

A practical wrinkle: many providers will release for the land as soon as the land purchase is unconditional, because that looks like a normal settlement. The build portion can be harder, because there may be no single "settlement" to attach the withdrawal to. If you are buying a bare section now and building later, talk to your provider about whether they will fund the section, the build, or both — before you commit to dates.

Our house deposit guide can help you size what the withdrawal covers against the land price and the build cost.

Does it work for turn-key, house-and-land and fixed-price contracts?

Broadly yes, but each contract type changes when the money is needed and how cleanly KiwiSaver fits.

• Turn-key: You sign one contract and take title only when the home is complete and the CCC is issued, paying a deposit up front and the balance at the end. For KiwiSaver this is the easiest fit, because the final payment looks like a normal settlement and the money releases at that point. The deposit, though, is needed early — so check whether your provider will release the deposit before completion or only the balance at the end.
• House-and-land package: Often structured as turn-key, but sometimes as separate land and build contracts. If it is two contracts, the KiwiSaver timing follows the land/progress-payment patterns above.
• Fixed-price progress-payment build: You own the land and pay the builder in stages against a fixed price. KiwiSaver can usually fund the land and contribute to the build, but the build draws are the part most likely to need careful sequencing with your provider and lender.

The label matters less than the underlying structure — whether there is one title transfer at the end (turn-key) or staged payments along the way (progress). Ask your builder and solicitor to spell out the payment schedule in writing before you assume KiwiSaver lines up with it.

What does your solicitor and Kāinga Ora need to see for a build?

Your solicitor does the heavy lifting on a build withdrawal. To process it, providers typically require your solicitor to verify and certify a defined set of documents. For a build, expect to supply:

• A signed build contract (and the land sale and purchase agreement, if buying the section separately).
• Evidence the property is or will be in New Zealand and your principal place of residence.³
• Your KiwiSaver provider's first-home withdrawal form, completed and signed.
• A solicitor's certificate confirming the agreement, your identity, and that the funds will be paid into the solicitor's trust account.

For a genuine first home, Kāinga Ora is not involved in the withdrawal itself — your provider and solicitor run it.⁵ Kāinga Ora only comes in for the previous-home-owner "second chance" pathway, where it must first determine you are in the same financial position as a first-home buyer.⁵ If that is you, build in extra time for that determination before your provider can act.

A key build-specific point: the building consent matters to your sequencing. A consent lapses if work has not started within 12 months of being issued, unless you ask the council for an extension before that date.⁸ If your KiwiSaver and finance are slow to come together, a stale consent can become its own problem.

What are the common timing mistakes that delay a build withdrawal?

Build delays rarely come from the KiwiSaver rules themselves. They come from the build's moving parts not lining up with the withdrawal. The council statutory clocks are a frequent culprit.

The RFI point is worth underlining. The 20-working-day statutory clock for a building consent pauses the moment the council issues a Request For Information, and an RFI is the single biggest cause of consent delay.⁶ The same 20-working-day timeframe applies to a CCC, and if no CCC application is made the council must decide whether to grant or refuse one 24 months after the consent was granted.⁷ On a turn-key build, none of this is academic — the title cannot transfer, and your KiwiSaver cannot complete the purchase, until the CCC is sorted.

Our first-home mistakes guide covers the wider list of withdrawal slip-ups, several of which apply to builds too.

How do you combine a KiwiSaver build withdrawal with construction lending?

A new build is usually funded by construction (progress-draw) lending, where the bank releases loan money in stages as the build hits milestones, rather than one lump at settlement. KiwiSaver has to coexist with that.

In practice, the question is what your KiwiSaver pays for and when, relative to the bank's draws. Common arrangements:

• KiwiSaver funds the land at land settlement, and the construction loan funds the build in stages.
• KiwiSaver contributes to the deposit or first draw, with the bank's progress payments covering the rest of the build.
• On a turn-key contract, KiwiSaver and lending both complete at the final settlement after CCC.

Banks and providers do not always agree on timing, and a construction loan has its own conditions, valuations and draw-down rules. This is the part of a build most worth mapping out early, because a mismatch — KiwiSaver ready but the bank's draw not yet due, or vice versa — can stall a stage. Our KiwiSaver-to-mortgage plan guide walks through how the two fit together.

Smiths Financial does not provide advice on mortgages or construction lending. This is general information only — please consult an appropriately authorised mortgage adviser or lender for advice on your construction loan.

Frequently asked questions

Can I use my KiwiSaver to buy a section and build later?

Often, yes. Many providers will release a first-home withdrawal for the land once the purchase is unconditional, because it resembles a normal settlement. Funding the build itself can be handled differently depending on your contract and provider, so confirm both with your provider before you set dates.³

When does my KiwiSaver money actually come out for a build?

It depends on the contract. On a turn-key build it typically releases at final settlement after the Code Compliance Certificate is issued. On a build where you settle the land first, it often releases at land settlement, with progress payments funded separately.³⁵

Do I get the money before the house is finished?

Not necessarily. On a turn-key contract the bulk of the money usually releases only at completion. The deposit is needed earlier, so check whether your provider releases the deposit up front or only the final balance.

How long do council consents take, and does that affect my KiwiSaver?

A council has 20 working days to decide a building consent and 20 working days to process a CCC, and the consent clock pauses on any Request For Information.⁶⁷ These do not change the KiwiSaver rules, but on a turn-key build the title — and therefore your withdrawal — cannot complete until the CCC is issued.

Is Kāinga Ora involved in a build withdrawal?

For a genuine first home, no — your provider and solicitor run the withdrawal. Kāinga Ora is only involved in the previous-home-owner "second chance" pathway, where it must first decide you are in the same financial position as a first-home buyer.⁵

What if my building consent runs out before I am ready?

A consent lapses if work has not started within 12 months of being issued, unless you ask the council for an extension before that date.⁸ If your finance and KiwiSaver are slow to come together, track the consent date so it does not expire while you wait.

This article is general information only and is not personalised financial advice. It does not take into account your particular financial situation, goals or needs. Before acting, consider whether it's right for you and seek advice tailored to your circumstances. KiwiSaver is a long-term savings scheme; government contributions, contribution rates, withdrawal rules and tax (PIR) settings are set by the Government and can change. Figures are correct as at 1 January 2025 — check current rules at ird.govt.nz, kiwisaver.govt.nz and sorted.org.nz. Craig Smith Business Services Ltd (FSP712931), trading as Smiths Financial, holds a Class 2 licence issued by the Financial Markets Authority and is a member of the Financial Dispute Resolution Service (FDRS). Written by Henry Smith, Financial Adviser; reviewed by Craig Smith, Principal Adviser. Last reviewed 1 January 2025.