Capital gains bonus for KiwiBuild buyers

Scoring a Kiwibuild house was already regarded as like winning a lottery, but the prize could be better still with another change by the Government.

Newshub: Housing Minister’s backdown on penalties for KiwiBuild property flippers

Newshub can reveal KiwiBuild has just become a much better investment.

The Housing Minister has quietly softened up the penalties applied to buyers who flip their home.

Documents obtained by Newshub show owners will no longer have to give up all capital gain they make on the house if they sell it within three years.

When Labour announced the policy in 2016, its plan to stop buyers reaping windfall gains was they must not on-sell their home for five years – or else they had to hand all the money they made to the Government.

That’s now changed to if buyers sell within three years, they must give up 30 percent of their profit.

“We really tried to strike the right balance here,” Mr Twyford says.

“We don’t want people cashing in on a potential windfall gain – but on the other hand, these houses are not subsided. People are paying for them with their own hard-earned cash.”

Is this a sign that it was harder to attract buyers to KiwiBuild ballots?

ODT editorial: Cracks appear in KiwiBuild

Kiwibuild, one of Labour’s primary policies, is showing signs of serious cracks.

The key for KiwiBuild and Labour will be winning the public relations battle, on which KiwiBuild narratives gain traction in the coming years.

Labour will suffer if the dominant view is that it is a lottery for yo pros (young professionals) who might be able to buy houses even in expensive places such as Auckland and Queenstown Lakes anyway.

Labour will be on the back foot if KiwiBuild is seen as a windfall for the likes of the graduate doctor and her online marketing manager partner who were the poster couple for the first such houses in Auckland.

And if KiwiBuild is seen as simply rebranding houses that would be built anyway, even apparently good progress towards the 100,000 target over 10 years will be seen as just spin.

It will be detrimental, too, if the view KiwiBuild is a useful hand-up for developers through guaranteed sales becomes the norm.

One wonders, too, if a scheme could have been devised so that potential lottery-like capital gains were ameliorated. Could KiwiBuild have been thought through better so that those buying at a discount would also have to sell at a reduction, the difference going to the next first-home buyer. Or the initial discount on market price would be returned to the government when the houses were sold. Although this has been achieved overseas, policies such as KiwiBuild can become mired in complexity.

Labour must be hoping the issues with the shaky start to KiwiBuild can be patched over, that it really can deliver lots of new homes and ease the housing crisis.

Crucially, it must hope its narratives gain purchase and the public can be convinced the scheme is positive with wide public benefits.

KiwiBuild was a ten year plan, but if it looks like a shambles in eighteen months time it may make the  2020 election campaign challenging for Labour.


KiwiBuild ballot in Wanaka extended due to lack of interest

A KiwiBuild ballot in Wanaka has been extended due to the low number of peoele entering the ballot, with some houses having no entries.

ODT: Northlake ballot extended

The South Island’s much-heralded first foray into KiwiBuild home ownership has been a bit of a fizzer — at least so far.

So few prospective homebuyers have entered the ballot for 10 KiwiBuild house and land packages in the Northlake suburb of Wanaka that the developer has asked to extend the ballot period by 10 days.

The ballot was due to close on Thursday.

KiwiBuild senior media adviser Mark Hanson said yesterday 20 ballot entries had been received.

‘‘Some houses have received no entries and the developer has asked us to extend the ballot to Sunday, November 18, to allow for people who they are working with more time to work through their pre-qualification process.’’

Inquiries yesterday did not produce any clear reason for the different levels of interest between Auckland and Wanaka but it is understood many Aucklanders entered the ballot in the final days.

The Northlake KiwiBuild homes were the first announced outside Auckland.

Four two-bedroom and six three-bedroom detached houses costing between $565,000 and $650,000 are in the ballot.

Two bedroom houses and sections for from $565,000 will be tough to afford for many ordinary Kiwis.

Mr Twyford had no comment to make yesterday on the level of interest in Wanaka KiwiBuild homes.

At the time he announced the Wanaka programme, Mr Twyford said the Queenstown-Lakes district had been “absolutely hammered by the housing crisis”.

“So here in Wanaka and Queenstown we’ll be announcing more KiwiBuild homes because we want to give young first-home buyers a crack at affordable home ownership and currently they’re locked out.”

He said there were plans for further KiwiBuild announcements in the Queenstown Lakes district in the coming weeks and months.

Wanaka is a part of the Queenstown Lakes district. KiwiBuild may need to review their intention to do more in the area.

It is not a surprise to see ups and downs in a project like KiwiBuild. It was a grand plan from Labour with a lack of preparation, as if they didn’t think they had a chance of getting into Government.

Twyford defends KiwiBuild

Minister of Housing Phil Twyford has conceded that Kiwibuild is not for poorer people, but for ‘middle New Zealand’. He is correct that they can’t afford new house mortgages – but that was clear years ago when he was promoting it as a fix for homelessness.

Twyford said that Judith Collins criticising the first Kiwibuild house owners as having travelled the world is mean spirited.

Collins yesterday:


It didn’t help that the purchaser described winning the Kiwibuild draw as like winning Lotto.




Bridges still complaining about compensating meth house victims

No one has suggested that drug dealers should be given any money when it was announced that people evicted from state houses over the meth contamination panic – see Housing NZ to compensate 800 tenants over bogus meth testing

The apology and offer to compensate kicked-out tenants by between $2500 and $3000 comes as a report into the agency’s meth testing regime was finally released on Thursday morning.

It found that between July 2013 and May 2018 nearly 5000 Housing New Zealand (HNZ) properties were tested for meth contamination, with about half of these tests testing positive for the too-low standard at the time.

Just one in five primary tenants were rehoused. The majority, just under 800, were found responsible and were kicked out of their properties, and 275 tenants were suspended from being housed by the agency for a period of one year.

Just one fifth of the tested properties would fail the new standard set in May, which is ten times higher than the previous extremely low trigger.

Given most homes have more than one person but just a single primary tenants, around 2400 people were likely affected.

Furthermore, about $7m in damages was charged to 542 tenants. But less than two per cent of this was actually recovered before HNZ stopped seeking them earlier in 2017, and that debt has now been cancelled.

But that’s the line of attack that National leader Simon Bridges took last week:

Remarkable Bridges is continuing his opposition to “what Phil Twyford is doing” this morning.

Bridges agrees with compensation but is barking at a passing Twyford regardless.

Jones is happy to see Bridges making a mess of leading the Opposition.

Phil Twyford has run in after Bridges’ interview making it clear that no ex state tenant convicted of meth manufacture or dealing will get compensation.

Bridges is not only barking at a passing car, he is inventing the car.

Meth house victims being compensated, unfathomable response from Collins, Bridges

People who were unnecessarily evicted from state houses due to extreme testing for methamphetamine contamination will be apologised to and compensated.

Housing NZ to right meth testing wrong

A report by Housing NZ into its response to methamphetamine contamination shows the organisation accepts its approach was wrong and had far reaching consequences for hundreds of people, Housing and Urban Development Minister Phil Twyford said.

“Housing NZ acknowledges that around 800 tenants suffered by either losing their tenancies, losing their possessions, being suspended from the public housing waiting list, negative effects on their credit ratings or, in the worst cases, being made homeless.

“Housing NZ is committed to redressing the hardship these tenants faced. This will be done on a case by case basis and the organisation will look to reimburse costs tenants incurred, and make discretionary grants to cover expenses such as moving costs and furniture replacement.

“They will also receive a formal apology from Housing NZ.

“This is what government accountability looks like. Housing NZ are fronting up, acknowledging they were wrong and putting it right.

“The approach to methamphetamine from 2013 by the government of the day was a moral and fiscal failure. Housing NZ had been instructed by then ministers to operate like a private sector landlord. This led to the wellbeing of tenants being ignored.

“Even as evidence grew that the meth standard was too low, and ministers acknowledged it wasn’t ‘fit for purpose’, the former government continued to demonise its tenants. At any time they could have called for independent advice. Our Government is choosing to do the right thing.

“Under the helm of chief executive Andrew McKenzie, Housing NZ is a very different organisation. It has a new focus on sustaining tenancies, being a compassionate landlord and treating drug addiction as a health issue. This whole sorry saga would not occur under the Housing NZ of today.

“The meth debacle was a systemic failure of government that hurt a lot of people. Our Government is committed to putting this right,” Phil Twyford said.

It was a debacle, and good to see genuine efforts to compensate in part at least.

It is difficult to fathom the National response. Judith Collins:

In Parliament today:

2. Hon JUDITH COLLINS (National—Papakura) to the Minister of Housing and Urban Development: Is it acceptable for Housing New Zealand tenants to smoke methamphetamine in Housing New Zealand houses?

Hon PHIL TWYFORD (Minister of Housing and Urban Development): Methamphetamine is, of course, illegal and is doing immense damage to communities across New Zealand. Our Government does not condone the smoking of methamphetamine anywhere; however, the member needs to understand the counterfactual: it is not acceptable for the Government—for any Government—to throw tenants and their children on to the street and make them homeless. We recognise that making people homeless does not solve a tenant’s problems or help people overcome addiction; it just moves the problem to somewhere else and makes it worse for the person involved, their family, their children, the community, and the taxpayer.

Hon Judith Collins: Where meth testing showed residues exceeding previous standards, can this meth have gotten into Housing New Zealand houses any way other than smoking or baking meth?

Hon PHIL TWYFORD: No, but there was no consistent baseline testing done by Housing New Zealand over those years. There is no way of knowing whether the hundreds of people who were made homeless under this policy had any personal responsibility for the contamination of those houses. Frankly, I’m shocked that the member, who used to be a lawyer, would think that that is OK. Is this the modern, compassionate face of the National Party?

Hon Judith Collins: When he said that “800 tenants suffered by … losing their tenancies,” is he saying that these 800 tenants were all wrongfully evicted from Housing New Zealand houses?

Hon PHIL TWYFORD: It depends what you mean by “wrongfully evicted”. Clearly, some of the 800 people—and I believe many of those people—had their tenancies terminated and were evicted without natural justice, without proper evidence of the case, on the basis of a bogus scientific standard. All of those people—all of the people who were evicted, bar some for whom the standard of contamination was more than the 15 micrograms per 100 centimetres that Sir Peter Gluckman recommended as a sensible standard—were convicted on the basis of a scientific standard that the previous Government allowed to persist for years on the basis of no scientific evidence that exposure to third-hand contamination posed any kind of health risk to anybody

Hon PHIL TWYFORD: There are many contradictory reports swirling around on this issue, but one that I’ve seen that makes a lot of sense is where, and I quote, “people were unfairly removed. If that’s the case, they should be compensated, and Housing New Zealand management should answer for it.” That’s exactly what today’s report does, and that quote is from Judith Collins.

Hon Judith Collins: Will people who smoked meth in Housing New Zealand houses now be given $2,000 to $3,000 compensation?

Hon PHIL TWYFORD: The point of the compensation is to compensate people who wrongly had their tenancies terminated and their possessions destroyed and who, in some cases, were made homeless. Those are the people who will receive a payment under the assistance programme.

Hon Judith Collins: Will people who sold meth in Housing New Zealand houses now be given $2,000 to $3,000 compensation?


I have no idea who Collins is trying to appeal to by highlighting a problem that happened under the National-led government.

Simon Bridges joined in as he barked at a number of passing cars today.

Alleging “compensation for meth crooks” is a fairly crooked attack.

Proposed changes to tenancy laws aim at long-term security

Housing Minister Phil Twyford says that the Government wants to “strike a balance between providing tenants with security of tenure and allowing them to make their house a home, while protecting the rights and interests of landlords”, but headlines his announcement as “Government to make life better for renters”:

The public is being asked for feedback on new Government proposals aimed at making life better for renters, Housing and Urban Development Minister Phil Twyford has announced.

“Our tenancy laws are antiquated and don’t reflect the fact that renting is now a long-term reality for many of our families. A third of all New Zealanders now rent,” Phil Twyford said.

I think that renting has been a long-term reality for a lot of families for a long time, but many people only rent for relatively short terms – see (2015) The average length of stay in a rental property is two years says Barfoot & Thompson

“Insecure tenure can forcer families to continually move house. This is particularly tough on children whose education suffers when they have to keep changing schools.”

Phil Twyford urges landlords, tenants and other interested people to have their say on the proposals covered in a discussion document on reforming the Residential Tenancies Act released today.

“We want to strike a balance between providing tenants with security of tenure and allowing them to make their house a home, while protecting the rights and interests of landlords.”

That could be a challenge. It will be difficult to legally require landlords to provide secure long-term tenancies, as that would bind them to long-term ownership of rental properties.

The discussion document covers proposals on:

  • ending no cause tenancy terminations while ensuring landlords can still get rid of rogue tenants
  • increasing the amount of notice a landlord must generally give tenants to terminate a tenancy from 42 days to 90 days
  • whether changes to fixed-term agreements are justified to improve security of tenure
  • limiting rent increases to once a year
  • whether there should be limitations on the practice of ‘rent bidding’
  • whether the general obligations that tenants and landlords have remain fit for purpose
  • better equipping tenants and landlords to reach agreement about pets and minor alternations to the home
  • whether further controls for boarding houses are needed to provide adequate protection for boarding house tenants
  • introducing new tools and processes into the compliance and enforcement system.

“As people rent for longer, they want to be secure in their homes and put down roots in their community. That’s why making life better for renters is an important aspect of the Government’s housing plan,” Phil Twyford said.

Should people who rent expect to be able to securely “put down roots in their community” long-term?

The discussion document and a link to an online submission survey are available at:

Construction problems – addressing ‘risky contracts’

At a time when a major construction boost is needed things look a bit shaky.

Fletcher Construction has had major problems – Roll call of Fletcher Buildings’ massive loss-making construction projects

Earlier this month: Ebert Construction in receivership, major apartment site locked down

KiwiBuild “socialism for the rich”

Phil Twyford and Labour talked up their ambitious KiwiBuild policy while in opposition, but have found implementation in Government difficult.

This week Twyford announced eligibility criteria for going in the ballot to get a KiwiBuild house which includes income caps of $120k for a single person and $180k for a couple. This has raised fresh criticisms.

Barry Soper: KiwiBuild scheme looking more and more like middle-class welfare

Phil Twyford was, in his words, opening the door to affordable home ownership, which was little more than a public relations exercise. He invited aspiring home owners to register their interest in a ballot for a KiwiBuild home which was a bit like taking a stab in the dark.

Far from opening the door, there’s still not a door to open – the first house has yet to make its appearance and over the next year just 1000 doors will beckon the ballots. And to qualify for a key to your phantom household you’ll have to be earning less than $120,000 if you’re a singleton and $180,000 if you have a partner.

Unfortunately it looks as though it’s shaping up to be a middle class housing programme where you’d certainly need that level of income to cope with the mortgage, with the current average expected to be $650,000 and rising.

$120-180k is hardly middle classes. It’s double average incomes.

The Government has also been criticised for it’s expensive fee-free tertiary education policy mostly benefiting better off students. And for it’s ‘winter warmer’ handout going to all pensioners, including far from poor ones like Winston Peters.

Bryce Edwards’ Political Roundup: Kiwibuild is now “socialism for the rich”

If there was any excitement brewing at being able to enter a lottery to buy an affordable Kiwibuild house, it was certainly short-lived, as further details revealed that the “lottery of birth” has probably already scuttled most people’s chances. Disappointment is setting in as more people realise that the scheme is really only going to benefit the rich.

This is because the houses are priced so high that few will be able to afford to even enter the final ballot for them. What’s more, many are asking why the income caps have been pitched so high that the scheme seems destined to be dominated by rich buyers who are after a good investment.

Newshub’s Jenna Lynch was highly critical: “in effect there is no real income cap. Only the top eight per cent won’t be able to buy these homes. It’s a free for all. This is not going to help those on low or middle incomes – they’ll be locked out by relatively high wage earners” – see her column: Kiwibuild a free for all.

According to Stuff journalist Henry Cooke, the “sky-high income cap”, together with any lack of “weighting for need or income like there is for state houses”, means the rich will benefit the most: “Needy families who could really use the help will be out in the cold hard private rental market while a couple of doctors making $80k each will happily move into a nice new home” – see: Why the Government is letting the rich buy KiwiBuild homes.

But Cooke reports that there is some logic behind this “socialism for the rich” approach. First, Twyford argues that there will be a trickle-down effect whereby the rich buying the Kiwibuild houses will eventually benefit the poor through other houses becoming cheaper (or just not getting more expensive).

I thought that ‘trickle down’ was a dirty term these days, especially on Labour’s left.

Second, there’s the need, electorally, for Labour to keep the rich happy, with the idea that Kiwibuild is also for them: “Setting the income cap so high also invites quite a lot of middle-class buy-in.”

In other words, handing out houses to a voting demographic. Some may call that vote buying (using taxpayer money).

Third, there’s a likelihood that the Government will actually need rich people to be buying the houses, given that they will be unaffordable to most others.

New houses are usually too expensive for lower income first home buyers.

There’s a line being run by the Government that the lottery-element of Kiwibuild is a great equaliser – because poor applicants have just as much chance of having their name picked as rich applicants. Twyford has said “Everyone has an equal shot in the ballot so people who are on a low income, or a high income, as long as they fit the criteria … then they can have a crack at doing this” – see Jane Patterson’s Ballot will keep Kiwibuild equal, Twyford says.

“Great equaliser’ is a nonsense claim.

It is an equal chance for those who can afford a half million dollar plus new house to be drawn from the ballot, but only some will be able to win a prize house.

From Reddit:

When even avowed lefty Bryce Edwards is calling you out with such a brutal headline you have a problem Phil.

This whole thing has been a complete and utter disaster from Labour. They campaigned on a fantasy and instead the lower and middle classes’ tax dollars are going straight into the pockets of property developers and investors.

He even used the trickle down argument!

Twyford seems to be stumbling from Pr disaster to disaster, and at best it is going to take some time for KiwiBuild to actually build any significant number of houses.

And by trying to show that he is making progress well before significant progress has been made could backfire.

If people who could afford to build their own home decide to sit and wait in the ballot hoping for a windfall capital gain thanks to the Government it could reduce new house building further in the private sector.



Response to KiwiBuild ballot criteria

There were nearly 6,000 registrations of interest for KiwiBuild homes on the first day people could apply.

There were also a number of criticisms of the generous income criteria for those eligible to buy tickets in the government housing lottery. Few houses are likely to be available this year, and not a lot next year either.

RNZ: Ballot will keep Kiwibuild equal, Twyford says

Requiring people to ballot for Kiwibuild homes would help to ensure those on lower incomes still have a good chance, Housing Minister Phil Twyford says.

The income caps are $120,000 for sole purchasers and $180,000 for couples.

To be eligible, buyers must be purchasing their first home, or be “second chancers” – those people who have not yet had an opportunity to own their own home or who no longer own one.

They must be New Zealand citizens, permanent residents or those who ordinarily reside in New Zealand, and intend to own and live in the house for at least three years.

As of early evening there have been nearly 6000 registrations of interest in KiwiBuild since it opened online at 10am, and the numbers are climbing.

The balloting system would help to avoid those on the higher incomes blocking out those earning less, Mr Twyford said.

“Everyone has an equal shot in the ballot so people who are on a low income, or a high income, as long as they fit the criteria … then they can have a crack at doing this.”

He defended the high threshold for the income cap saying there were “not many” houses in Auckland people earning more than $100,000 could afford.

But some people will be more equal than others – those who can afford deposits, and those who get drawn from the ballot.

National’s Amy Adams: KiwiBuild a fail for lower-income families

The Government is admitting that its ‘affordable’ KiwiBuild houses are out of reach for many lower and middle income families by having to lift the eligibility criteria to $180,000, National’s Finance spokesperson Amy Adams says.

“Housing Minister Phil Twyford has set the eligibility criteria for KiwiBuild so wide that 92 per cent of first home buyers are eligible. That’s because he knows he will fail to deliver houses that are affordable to lower and middle income earners.

“Having such a wide criteria and a ballot system to determine the lucky few to get a subsidy is unfair and will mean struggling families could miss out in favour of higher income families and people with significant cash assets.

“There are 24,000 first home buyers a year and the Government is now only planning to deliver 1,000 homes in its first 20 months in office – so they should be targeted to lower and middle income families.

“It is ironic that Labour doesn’t think that someone on the average wage deserves a tax cut, but believes families earning $180,000 deserve a subsidy to help them buy their first home.

Some people on lower incomes will be able to benefit from low rent state houses.

But KiwiBuild is likely to be dominated by people on higher incomes who see an opportunity to make some capital gain from a cheaper Government funded/built house.

Qualifying for Kiwibuild ‘affordable home’

Ahead of an announcement expected today Stuff has details on eligibility to buy a Kiwibuild home, optimistically labled ‘affordable’ in Couples earning up to $180k will be able to buy homes

The income test is $120,000 for a sole buyer or $180,000 for a couple. Both citizens and New Zealand residents will be eligible.

The homes will be available to all first-home buyers and most “second-chancers” – usually people who go through a divorce and have lost property. Second-chancers must not have assets exceeding $120,000 in Auckland, $100,000 in most other cities, or $80,000 for the rest of New Zealand.

First-home buyers will not be subject to a financial asset test – they will simply need to be buying a first home.

Housing Minister says this will allow 92% of first home buyers to be eligible. Presumably the other 8% earn too much. And presumably, most of them should be able to buy a house without Government help.

Occupation and resale requirements:

Those who purchase a home will need to live in it for at least three years without selling it, but will be able to rent out spare rooms to flatmates.

Some purchasers will be able to sell the home within three years if special circumstances such as a death or serious illness occur – but they will need to apply for permission from the Government, who will consider each person on a case-by-case basis.

Scoring a Kiwibuild house will be a type of lottery for those who pass eligibility tests.

For the first years of the scheme, the homes will be balloted, meaning every eligible buyer who enters will have an equal chance of buying a home.

As has been widely noted, ‘affordable’ is still a hell of a lot for first home buyers.

Three-bedroom homes in Auckland and Christchurch will cost $650,000 or less, with two-bedroom homes costing $600,000 or less and one-bedroom homes costing $500,000 or less.

All KiwiBuild homes outside of Auckland or Christchurch will cost $500,000 or less.

That’s still a lot of money – and for most wanting a new house it will mean a lot of mortgage, if they can get one.

First, houses will need to be built. Actually no, first sufficient suitable land will need to be found and pass Resource Consent requirements.