Opposition Finance Spokeswoman Amy Adams says the $180,000 income cap for would-be KiwiBuild homeowners is far too high and says the upper limit should be closer to $130,000.
But Finance Minister Grant Robertson says the cap just reflects the state of the housing market left by the previous Government.
On Wednesday, Housing Minister Phil Twyford outlined the eligibility requirements for KiwiBuild homes.
These include an annual income cap of $120,000 for an individual and $180,000 for a couple.
So far, the interest has been strong and with 6000 people had registered their interests in a KiwiBuild home by Wednesday evening - that number was 2800 at 12:30 earlier that day.
Adams says the income limits are “a bit of a joke.”
“They have come up with an income cap that is more than twice the average household income.”
She says this means middle-income families will have to compete with wealthy income earners and people with substantial assets, locking many out of the market.
“Twyford knows these houses are not affordable to low and middle-income earners and he has had to widen the catchment pool for buyers right up to almost the top of income earners to make sure it’s not a complete flop.”
So, what should be the upper-income limit? Adams says National’s First Home Buyers policy before the election had a couple’s or family’s cap of $130,000 and $80,000 for an individual.
She says that would have bought 80,000 new buyers to the market.
“That’s where we put the cap, we thought it was the right balance between helping middle-income New Zealanders that meant the average household income sat comfortably within that.”
She is also critical of the requirements around how long people must live in the home.
The KiwiBuild eligibility document states would-be owners must sign a statutory declaration that they intend to own and live in the home for at least three years.
“It’s Goldilocks,” Twyford said when speaking to media on Wednesday, “it’s not too hot and it’s not too cold – three years is just about right in terms of an obligation to live in the house.”
But Adams says it looks like New Zealand now has “policy by nursery rhymes.”
“It’s indicative of the dismissive attitude this Government is taking to the spending of billions of dollars of taxpayers' money.”
Robertson says the $180,000 income cap is recognition that the housing crisis is deep and that large swaths of first home buyers are locked out of the housing market.
“The housing crisis has reached such a point where there is a very large percentage of first home buyers locked out.”
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