The government is changing the KiwiSaver Act to allow first-time farm buyers and other workers with “live-in” work accommodation to use their accounts to buy their first home.

For over 10 years, people have been able to withdraw from their KiwiSaver account to buy their first home as long as they live in the home they bought.

Finance Minister Nicola Willis said the rules unfairly prevented people in jobs that required them to live in provided housing from getting onto the property ladder.

“Service sector workers such as agricultural workers, rural teachers, rural police officers and defense personnel are effectively excluded from the first round of home confinement because their jobs require them to live in employer-provided housing,” she said.

”[That’s] That’s not fair, which is why we’re making technical changes to the KiwiSaver Act to ensure service tenant workers aren’t denied the opportunity to get their foot on the property ladder.

“This change will allow employees of service tenants to use KiwiSaver for their first home purchase, without having to live there.”

Business and Consumer Affairs Minister Scott Simpson said the law would be changed to allow first-time farm buyers to use their KiwiSaver balance to fund the purchase of a farm through a majority-owned commercial organization, which would become their primary residence.

He said KiwiSaver rules currently allow farms to be purchased in the name of a KiwiSaver member, as long as the member intends to live there, but in reality most farms are purchased through companies or trusts.

“This reflects the commercial reality of modern farm ownership. Most farms are purchased through companies or trusts, so until now aspiring farmers have not had the same access to KiwiSaver as they would have if they were buying a house in town.”

“These reforms deliver on the government’s commitment to support rural New Zealand and remove unnecessary barriers. These are targeted, practical changes that will make the scheme fairer for rural communities, while maintaining KiwiSaver’s core purpose,” Mr Simpson said.

Legislation implementing the changes is expected to be submitted to Parliament in the middle of this year.

The changes reflect an idea put forward in a lawmaker’s bill by Rangitikei MP Suze Redmayne.

Redmayne, who is also a shepherd, said the idea came from her livestock manager, who had saved enough for a down payment but was not allowed to spend the money because she lived and worked on the farm.

“I know young people in town who are putting 8 to 10 per cent into KiwiSaver because they can see that goal right in front of them, whereas younger farmers are putting in nothing at all, or just the bare minimum of 3 per cent, because 65 is a lifetime away,” she said.

“So I think this is… a great motivator and a great inspiration.”

Mr Willis said rural communities had “vigorously advocated” for the change, although Wellington city officials were less enthusiastic.

“It’s about recognizing that rural New Zealand is different from urban New Zealand and that sometimes our rules need to take that into account. It’s about fairness.”

Mr Willis said there were no official statistics on how many service tenants were on the farm, but that there were around 900 defense personnel, 200 teachers, 200 police officers and 500 health workers, a “sign of a disconnect”.

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