Farmers shut out of housing
Canterbury dairy herd manager Graham Hart says he has had to put his dream of buying a first home on hold because KiwiSaver rules stop him from using his savings for a deposit.
KiwiSaver can be used for a deposit on a first home after someone has been in the scheme for three years. But the owner must then live in the house for the first six months.
Hart said he was renting the farmhouse that came with his job and would not immediately live in the house he bought, but would rent it out to cover the mortgage.
The house would provide security in case he lost his job, or decided to quit dairy farming, he said, and he did not want to wait to buy a house until he retired.
The only way to get around the rule was to change his postal address and have it appear he was living in the house, Hart said.
But he said he and his wife did not want to lie to the government, and they decided to delay their purchase.
A rule change that allowed farmers, and anyone who had tenancy agreements as part of their employment contracts, to use KiwiSaver to buy a house as a nest egg, or for retirement would be fair, Hart said. ‘‘People who live where they work and have a house provided is a unique situation. It would be reasonable for the Government to change the laws around KiwiSaver in such cases.’’
Hart had worked for the same employer for 11 years and said such stability should be a consideration.
He did not want to buy a farm, or save for a herd, but was happy being employed as a farmer. He wanted to prepare for the future, and a home in town was part of that plan, he said.
Federated Farmers share milking chairperson Aaron Passey said if a farmer could prove they had a tenancy agreement as part of their employment contract, then regulations should allow them to buy a house and not live in it.
Such a law change should apply to other professions that often had tenancy agreements as part of employment contracts, such as rural teachers, rural police, in-home caregivers or military personnel, Passey said.
The rules around using KiwiSaver to buy a first farm could also be relaxed, he said.
Farmers bought farms in their business’ name for GST purposes, but KiwiSaver rules around withdrawals required that it be bought in a person’s name, he said.
Some farmers were sidestepping the rules by subdividing a farm and buying the house in their name at a potential cost of tens of thousand of dollars in legal fees, Passey said.
People who owned their own home in retirement were better off, he said.
Federated Farmers had raised the issue with Agriculture Minister Damien O’Connor, who had passed it on to Commerce and Consumer Affairs Minister David Clark in May.
Federated Farmers had not heard back from Clark, Passey said.
Clark said earlier this year that he was reviewing KiwiSaver, but the review did not cover withdrawals.
Clark said he was told by Ministry of Business, Innovation and Employment (MBIE) officials that primary sector representatives had recently made suggestions about how KiwiSaver could help people working in farming become homeowners.
There might be some circumstances that prevented people from meeting the eligibility criteria, Clark said.
Clark said he had asked that the potential circumstances [in the primary industries] be looked at in future.
‘‘People who live where they work and have a house provided is a unique situation.’’
Graham Hart, above