Interim Retirement Commissioner Peter Cordtz has clarified that his proposal to allow KiwiSaver first-home withdrawals to be used for investment properties did not make it to the recommendation phase.
Cordtz said in the Commission for Financial Capability’s three-yearly Review of Retirement Income Policies last week that the proposal has missed the cut. However, it received support from young, urban Kiwis “who fear they won’t be able to buy a home to support their retirement in the city.”
“On the other hand, we received quite a lot of opposition in fear of the impact this could have on a sensitive housing market across the country, and the impact on smaller communities and rural areas where affordability issues are already impacting,” Cordtz said, as reported by Landlords.co.nz.
“They had been convinced that this suggestion should be approached through a housing policy lens, rather than from a savings perspective,” he continued. “Moreover, we think that the impacts likely to be caused by such a change should be extensively modelled before being confirmed. We will work with the Ministry of Housing and Urban Development to explore this option further.”
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Cordtz proposed the use of KiwiSaver for investment property in October 2019 to help Kiwis climb the property ladder or retire in the future. Instead, one of the recommendations that were considered was removing the existing six-month residency requirement when using KiwiSaver to purchase a first home.
Cordtz explained that the consideration might have been driven by people asking why there is a six-month hold-up to them renting out their first home, with some ignoring it.