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.’’ . .
And Housing Minister Phil Twyford has backed down on penalties for those who flip KiwiBuild properties early:
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. . .
There is big money to be made. Based on the last three years, the average price of a home in Papakura has risen from $569,000 to nearly $700,000, meaning house owners could have made $130,000 in the last three years.
That means even after the 30 percent penalty applied by the Government, they’d still pocket more than $90,000.
A $90,000 profit for selling up after three years – that’s very easy money.
But you don’t have to wait three years – you will get to keep 70% of the profit it you sell the very next day.
This is not the first KiwiBuild backdown we’ve seen. Since being in government, Mr Twyford has changed the price caps, the eligibility criteria and now this – a change which has the potential to leave KiwiBuild open for abuse.
With each announcement the KiwiBuild lottery gets better for the lucky few who win.
The government keeps saying KiwiBuild houses aren’t subsidised but if the government isn’t putting money in why would the owners have to hand over any profit if they sell?
At the very least there’s an opportunity cost with money spent on this policy not available for spending on the many areas of much greater need – and that’s people on well below the income level for those who qualify for the KiwiBuild lottery.
You can follow progress on the scheme here – so far only four houses have been sold.