Source: Federated Farmers
Federated Farmers is celebrating a major win for young farmers, with the Government finally allowing them to use their KiwiSaver funds to buy their first home or farm.
“Young Kiwi farmers have been incredibly frustrated that they haven’t been able to access their KiwiSaver to help get a foot on the property ladder,” Federated Farmers dairy chair Karl Dean says.
“This change announced by the Government today – removing those barriers – is a huge step forward for the next generation of farmers.
“We’re immensely proud to have led the charge on this issue, advocating for a change to the KiwiSaver rules for three long years.”
Finance Minister Nicola Willis and Commerce and Consumer Affairs Minister Scott Simpson announced today that they will be making a technical change to the KiwiSaver Act.
It means farm staff in service tenancies (living on farm) will soon be able to use KiwiSaver to purchase a house without immediately moving in.
“Until now, you could only use your KiwiSaver to purchase a house you’ll live in,” Dean says.
“That’s unfair because farm staff, along with the likes of rural teachers and rural police, haven’t been able to get on the property ladder, all because they live remotely and in employer-provided accommodation.
“They’ve been denied the same opportunity as their urban counterparts.
“This change means young rural workers can finally access their savings to secure financial security and begin building equity, even if they keep living in accommodation provided by their employer.
“It’s a massive result and I know there’ll be many young farmers out there celebrating right now.”
The Government’s changes will also allow first-time farm buyers to use their KiwiSaver balances when buying through a commercial entity they majority own, provided it will be their principal place of residence.
Dean says the impact of this can’t be overstated, highlighting the challenges young farmers face in buying a farm.
“So many young farmers have worked hard to save a decent deposit but just aren’t able to get the bank’s backing to invest in their first farm.
“Letting those farmers use their KiwiSaver will be an enormous help in pulling together a larger deposit.
“It will put them in a stronger financial position with their initial equity, but they’ll also have less debt – which means they’d be paying less interest too.
“All of that gives our next generation of farmers a better chance of building wealth and putting themselves in a good position come retirement.”
Getting the KiwiSaver rules amended has been a key priority for Federated Farmers, forming part of its 12-point policy agenda for the incoming Government back in 2023.
The National Party committed to making the change, announcing so on the eve of the 2023 election.
“It’s taken them a long time to deliver on that promise, and we’ve made sure to keep reminding them about it,” Dean says.
“We’re grateful the Government has finally come through for farmers.”
One young farmer celebrating the news is Waikato sharemilker Danielle Hovmand, who has challenged the Government several times to deliver on its 2023 campaign commitment.
“Talking with young farmers across the country, their most-asked question is: ‘When are we going to be able to use our KiwiSaver to better ourselves now, rather than having to wait until we retire – just because we’re farmers’.
“I’m very pleased to hear the Government are finally changing the rules to make that possible.
“Many young people’s goal is to buy their first home and get on the property ladder, so it’s refreshing to see farmers will be able achieve this too.”
Hovmand says this will open doors for young farmers to use their hard-earned savings towards something that can have a huge impact on their financial position.
“Hopefully, in years to come we’ll see the flow-on effects of more young people being able to purchase their own herds and then achieving farm ownership earlier.
“I think this will have a huge impact on farmers across the country and will continue to help strengthen the agriculture industry for many years to come.”
Legislation giving effect to the changes will be introduced to Parliament in the middle of the year.
