An under-pressure Phil Twyford has hit back at reports people with access to up to $650,000 in deposit money for a KiwiBuild home should be exempt from the scheme.

He has also rejected any assertion that KiwiBuild buyers should be means-tested when it comes to their deposit – "we are not in the business of banning the bank of mum and dad".

An upset Twyford came out swinging on his way to Labour's weekly caucus meeting this morning.

RNZ today reported that, according to an Official Information Act request, someone who could raise up to $650,000 for a house deposit would still be eligible for a KiwiBuild home.

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This was based on data from 500 pre-approved KiwiBuild applicants.

The data showed 16 applicants declared deposits of more than $200,000, with a number of others declaring more than $300,000 – the KiwiBuild unit told RNZ that three people said they could raise $650,000.

Speaking to reporters this morning, Twyford said the data was "raw" and "error-prone" and accused RNZ of "willfully misrepresenting [the] data".

"[The data] is basically compiled from information that people have entered at home into a website questionnaire."

He said in one of the cases, where someone declared a deposit amount of $570,000, that same person purchased a KiwiBuild home with an $80,000 deposit and a $490,000 bank loan.

There is an income cap of $120,000 per year for a sole purchaser or $180,000 if multiple people want to buy a KiwiBuild home.

But there is no such limit when it comes to how much the would-be buyer has in the form of a deposit.

National Housing spokeswoman Judith Collins said not means testing KiwiBuild was just welfare for the rich. Photo / Mark Mitchell
National Housing spokeswoman Judith Collins said not means testing KiwiBuild was just welfare for the rich. Photo / Mark Mitchell

National's housing spokeswoman Judith Collins said this was not fair.

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"It's not fair because this is a taxpayer-funded scheme in which $2 billion was put in last year's budget".

She called it a "welfare scheme for developers – and a welfare scheme for New Zealanders who have plenty of money they can get from their parents or someone else".

But Twyford said it has never been the policy of the Government to have an asset or means test when it comes to KiwiBuild.

He said if people want to get deposits from their parents, relatives or friends, they are able to do that.

"For generations, young New Zealanders have got into their own homes by marshalling resources from wherever they can, including the bank of mum and dad."

He said the Government was in the business of trying to make home ownership easier not harder and it would not restrict young first-home buyers from using borrowed money from relatives to get a first home.

"It's as Kiwi as pavlova and anything else that people should be able to mobilise family resources."

He called Collins out on her criticism and said that under the previous National Government there was no means testing for any of their first-home buyers policies either.