First-home buyers rightly want to bring every bit of help they can to the table — the savings they've built in KiwiSaver, and the government schemes run by Kāinga Ora. So a fair question about Passive Partnerships is: do those still work if I'm only buying a share of a home, with a passive investor co-owning the rest and no bank mortgage on my side?
The short version: your KiwiSaver first-home withdrawal almost certainly still works — it's the one piece of government help that fits a Passive Partnership cleanly. The Kāinga Ora schemes mostly don't, because they're built around a normal bank mortgage and a sole owner-occupier — the very structure a Passive Partnership replaces.
The quick answer
| Scheme | With a Passive Partnership? | Why |
|---|---|---|
| KiwiSaver first-home withdrawal | Likely yes | The KiwiSaver Act expressly allows withdrawing to buy a "tenant in common" share. No mortgage needed. Tests only your first-home status and intention to live there. |
| First Home Grant | Gone | The grant was scrapped on 22 May 2024. It no longer exists for any buyer. |
| First Home Loan | Likely no | It's a bank mortgage underwritten by Kāinga Ora, for owner-occupiers buying the whole home. A Passive Partnership has neither a bank loan nor a sole owner-occupier title. |
| First Home Partner | Likely no | Closed to new applicants since 2023 — and it's Kāinga Ora's own shared-ownership scheme, which can't sit alongside a private one. |
| Kāinga Whenua loan | Not applicable | Only for housing on multiply-owned Māori land, which can't be mortgaged. Unrelated to an ordinary Passive Partnership. |
KiwiSaver: the part that works
The KiwiSaver first-home withdrawal is a settlement-funding tool, not a loan — and that's exactly why it fits. The KiwiSaver Act 2006 lets a member withdraw their savings "for the purchase of an estate in land… whether alone or as a joint tenant or tenant in common," as long as the home "is, or is intended to be, the principal place of residence for the member."
Two things matter in that wording. First, it talks about a tenant in common share — which is exactly how a Passive Partnership resident holds their part of the home. Second, the rules care about your circumstances — your first-home status and your intention to live there — and not about who your co-owner is or how the rest of the home is funded. There's no requirement for a bank mortgage, so the fact that a Passive Partnership resident doesn't borrow from a bank isn't a problem.
The usual KiwiSaver conditions still apply:
- You've been a KiwiSaver member for at least 3 years.
- You leave at least $1,000 in your account.
- You're a first-home buyer (or a "second chance" buyer Kāinga Ora deems to be in a similar position).
- You intend to live in the home as your principal residence — it can't be an investment property.
At settlement, the withdrawn funds are paid to your solicitor's trust account and applied to the purchase — and returned if the deal falls through. That mechanism works the same whether you're buying 20% of a home or 100%.
The Kāinga Ora schemes: why they don't fit
The government's home-ownership help mostly comes in the form of lending — and lending assumes a normal bank mortgage and a single owner-occupier. That's the opposite of how a Passive Partnership is built, so most of these schemes simply don't apply.
First Home Grant — abolished
The First Home Grant was closed with immediate effect on 22 May 2024 as part of that year's Budget. It no longer exists for any first-home buyer, with or without a Passive Partnership.
First Home Loan — needs a bank mortgage
The First Home Loan lets buyers get in with a 5% deposit by having Kāinga Ora underwrite the lender's mortgage insurance. But it's still a registered mortgage from a participating bank, and it's for owner-occupiers buying the whole home. A Passive Partnership resident isn't taking a bank loan over the property, and the home is co-owned with a non-occupying investor — so there's nothing for Kāinga Ora to underwrite, and the owner-occupier-of-the-whole-home test isn't met.
First Home Partner — closed, and a rival scheme
First Home Partner is Kāinga Ora's own shared-ownership scheme, where the Crown co-owns up to 25% of your home and you buy it out over time. It stopped taking new applications in 2023 ("fully subscribed"). Even if it reopened, you can't be in two shared-ownership arrangements at once — its co-owner has to be Kāinga Ora, it requires a bank mortgage, and it expects you to buy the Crown out. A Passive Partnership is a different animal: a private investor, no buy-out obligation, no bank debt.
Kāinga Whenua — Māori land only
Kāinga Whenua loans help people build or buy a house on multiply-owned Māori land, which legally can't be mortgaged. It's a narrow, specific scheme that doesn't apply to an ordinary Passive Partnership on fee-simple land.
The bottom line
If you're a first-home buyer, the most valuable lever you have — your own KiwiSaver savings — comes with you into a Passive Partnership. That's the deposit help most buyers actually use. The Kāinga Ora lending schemes are designed around a full bank mortgage you don't need and don't have, so they fall away — but that's the point of the model: it gets you owning a home without the bank loan those schemes exist to support.
Because the structure is new, treat the KiwiSaver point as "confirm, then rely." We can walk you through exactly what to ask your provider, and you should always take your own legal and financial advice before committing.
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Run the numbers → Join the waitlist →This article is general information, not legal, financial or tax advice, and scheme rules can change. Confirm your KiwiSaver withdrawal directly with your provider and take independent advice before relying on it. Current as at 2026.