Will KiwiBuild be income tested?

"The taxes of those who have lived and worked in New Zealand should not be used to subsidise those wealthy enough to buy a home"

Will KiwiBuild be income tested?

The latest round of questioning within parliament revealed that it has not been decided whether income limits will be applied to prospective KiwiBuild buyers.

Housing Minister Phil Twyford has stated that the criteria for prospective KiwiBuild buyers is still under development, but it was previously understood that the scheme would not be utilising any income caps. Under questioning, Twyford stated that the question of income limits has not yet been fully decided.

The scheme will be offered only to permanent residents buying their first home to ‘avoid buyers reaping windfall gains’, but the Government has said that affordable housing should not be limited only to those on low or moderate incomes.

National Party has criticised the move, saying that a lack of income limits meant no way of ensuring that KiwiBuild houses will go to those that need them most.

“This could mean a New Zealand-born couple who have spent their lives working offshore and have a $300,000 deposit could be eligible for a KiwiBuild house even though they have never worked or paid taxes in New Zealand – most Kiwis would agree that’s not fair,” says National spokesperson Judith Collins.

“The taxes of hard working carpenters, plumbers and electricians who have lived and worked in New Zealand should not be used to subsidise those that are wealthy enough to buy a home.”

Income testing has been utilised by other Government initiatives including the HomeStart grant, which is available to those contributing to a KiwiSaver scheme for at least three years. The HomeStart grant is available to sole buyers earning less than $85,000 before tax, or to two or more buyers earning less than $130,000.

The Government is also implementing the Buying off the Plans initiative, which involves the Government underwriting or purchasing new homes off the private sector plans in exchange for accelerating a larger number of KiwiBuild houses.

Further criteria for KiwiBuild homebuyers is still under development.

 

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