Bank entitled to demand return of KiwiSaver funds

Sébastien bought a section and planned to build a house on it. Several years later, he applied to withdraw money from KiwiSaver under the first-home-buyer provisions of the KiwiSaver Act 2006. He contacted the bank for information about the withdrawal process. The bank told him he would not be eligible to withdraw the money if he had already bought land. Sébastien replied that he had not bought it yet because he was still paying for the house and land. The bank officer understood this to mean a house-and-land package.
October 2021

 Sébastien completed the withdrawal process, which included a declaration that he had not owned land before. The solicitor handling the sale undertook to pay any KiwiSaver funds to the seller as part of the purchase price, and to return the funds to the bank if settlement was not completed by the due date. The bank approved the application, and the funds were sent to the solicitor’s trust account. Shortly afterwards, the solicitor advised the bank that Sébastien had owned land before and was not eligible to withdraw KiwiSaver funds. The bank sought the return of the funds. Sébastien complained that the bank should have exercised its discretion under the Act to allow the withdrawal to proceed.

Our investigation

The Act says KiwiSaver funds cannot be released under the first-home-buyer provisions if the applicant has previously held “an estate in land”. Having owned land already – the section – Sébastien was not eligible for a withdrawal for a first-home purchase. We considered the bank acted fairly and reasonably in requiring the return of the funds.


We did not uphold Sébastien’s complaint.               

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