Couples earning up to $180,000 will qualify for the Government's new KiwiBuild affordable homes, it was announced yesterday.

The price cap for any of those houses built in Tauranga will be $500,000 (including GST).

Housing and Urban Development Minister Phil Twyford said eligible buyers would have an equal chance to own a KiwiBuild home at cost price through a ballot system.

Those people would have to be first-home buyers or "second chancers", New Zealand citizens, permanent residents or those who ordinarily reside in New Zealand, and they would need to intend to own and live in the new home for at least three years (with some exemptions).

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The income limit for sole purchasers would be $120,000.

Housing and Urban Development Minister Phil Twyford revealed the terms and conditions of the new KiwiBuild scheme yesterday. Photo / File
Housing and Urban Development Minister Phil Twyford revealed the terms and conditions of the new KiwiBuild scheme yesterday. Photo / File

Tauranga mayor Greg Brownless said the income limits seemed too high and were way above an average wage.

"If we're looking to help people into houses that really need it, I would have thought the income limit would have been lower."

He said the purpose of KiwiBuild should be to help people with combined incomes of "way less than $100,000" and with single incomes of around $50,000 to $60,000 or less.

Brownless also questioned the ownership minimum of three years and suggested it should be 10, because that would get rid of "any chance of people doing it just to profit".

However, he said it would still be good to see "several hundred" KiwiBuild homes built in Tauranga to deal with the "ever-escalating price of houses".

During a visit to Tauranga in April, Twyford did not say how many KiwiBuild houses would be built in Tauranga or when that could start, but referred to "a significant number".

Classic Builders director Peter Cooney, one of the largest builders in Tauranga, also felt the KiwiBuild income thresholds sounded high.

He was sceptical about KiwiBuild being able to increase the supply of affordable houses.

Developers did not need the Government to underwrite them when the price range KiwiBuild was targeting was already seeing huge demand, Cooney said.

"If I build houses for $500,000 in Tauranga, I'd have a list of people as long as my arm wanting to buy them."

Cooney said ideally KiwiBuild would target lower price brackets, "but the problem is you can't buy the land and build houses for that price".

He said the only way to achieve that was to free up more land at a quicker pace. There was also the issue of access to labour.

Yesterday Twyford said KiwiBuild faced five major challenges – land availability, workforce constraints, consenting time frames, development and build times, and growth capacity constraints.

He said the household income threshold had been set that high because the programme was "not welfare, but an aspirational middle-class policy".

"We want to make it available to as broad a range as possible of young Kiwi families."

The Government plans to build 100,000 KiwiBuild homes in 10 years, at least 50,000 of which will be in Auckland.