Source: New Zealand Government
The Government is removing the barriers that prevent many farm and other rural workers from using their KiwiSaver accounts to buy their first homes, Finance Minister Nicola Willis and Commerce and Consumer Affairs Minister Scott Simpson announced today.
Since 2010, Kiwis have been able to withdraw from their KiwiSaver accounts to assist with the purchase of a first home so long as they live in the homes they buy.
“However, workers in service tenancies, such as farm workers, rural teachers, country cops, and defence personnel, have effectively been locked out of first home withdrawal because their jobs require them to live in employer-provided housing,” Nicola Willis says.
“That’s not fair, so we’re making a technical change to the KiwiSaver Act to ensure workers in service tenancies aren’t denied the opportunity to put a foot on the property ladder.
“The change will allow service tenancy workers to use their KiwiSaver for a first home purchase without having to live in it.”
Scott Simpson says the Act will also be changed to allow first-time farm buyers to put their KiwiSaver balances towards the purchase of a farm through a commercial entity they majority own, where it will be their principal place of residence.
KiwiSaver rules currently allow the purchase of a farm under a KiwiSaver member’s name (so long as they intend to live on it) – however, in practice, most farms are purchased through a company or trust.
“This reflects the commercial reality of modern farm ownership,” Mr Simpson says.
“Most farms are purchased through companies or trusts. Until now, that has prevented aspiring farmers from accessing KiwiSaver in the same way as someone buying a house in town.”
“The reforms deliver on the Government’s commitment to back rural New Zealand and remove unnecessary barriers.
“These are targeted, practical changes that maintain KiwiSaver’s core purpose while making the scheme fairer for rural communities,” Mr Simpson says.
Legislation giving effect to the changes will be introduced to Parliament in the middle of the year. The changes were sparked by a Member’s Bill in the name of Rangitīkei MP Suze Redmayne.