KiwiSaver changes open the door to first farm ownership

Good news for rural workers

For many in the rural sector, particularly sharemilkers, contract milkers and farm managers eager to climb the property ladder, this represents a meaningful step toward farm ownership. Legislation giving effect to these changes will be introduced to Parliament in the middle of the year. 

Key changes

Until now, KiwiSaver first-home withdrawals have been limited to residential property purchases, with strict requirements that the buyer both owns and lives in the home. This has created barriers for those pursuing farm ownership, as farms are often:

• Purchased through companies or trusts, rather than in an individual’s name, and
• Used as both a business and a place of residence, sometimes with accommodation arrangements tied to employment.
  
  

The upcoming changes are designed to address these challenges by allowing eligible KiwiSaver members to withdraw their funds to buy a first farm, even where the ownership structure is more complex. 

Who can benefit?

The updated rules will apply to people who would ordinarily qualify for KiwiSaver first-home withdrawal, who have contributed to KiwiSaver for at least three years and not previously owned a home (or being approved as a ‘second chance’ buyer). The changes are aimed at first-time farm buyers, not those expanding existing farming operations.

Key conditions

While the rules are becoming more flexible, there are still some important conditions for first-time farm buyers:

• Control of the farm: You must have a meaningful ownership interest in the entity purchasing the farm (for example, a majority shareholding or controlling interest). This ensures KiwiSaver is being used to support genuine ownership, not passive investment
• Connection to the property: The farm must still have a residential element connected to you. While the strict ‘live in the home’ rule is being relaxed, the purchase must still align with the intent of helping you secure your primary place of living and working
• First property focus: The withdrawal remains limited to your first property purchase (or equivalent approved situation), and
• Standard application process: You will still need to apply through your KiwiSaver provider, providing supporting documents such as a signed sale and purchase agreement and statutory declarations.

Why this matters for farmers

For many in the dairy and wider farming sector, progressing from employment or sharemilking into ownership has always required significant capital. KiwiSaver is often one of the few accumulated assets available to younger farmers. By allowing KiwiSaver funds to be used in farm purchases — and recognising company and trust structures – the law is now better aligned with how farming businesses actually operate.

This change is expected to improve access to deposits for first-time farm buyers, support succession planning within the rural sector and help younger farmers transition into ownership earlier.

Considerations before proceeding

While the changes are positive, there is still some complexity involved. Before relying on KiwiSaver funds for a farm purchase, it is important to consider:

• How the farm purchase will be legally structured
• Whether your level of ownership meets the control requirements
• The impact on lending and finance arrangements, and
• Ensuring your application meets your KiwiSaver provider’s requirements.

We recommend you seek legal and financial advice early in the process; this will help ensure everything is set up correctly from the outset.

Final thoughts

These reforms mark a practical and long-overdue shift in KiwiSaver policy. By acknowledging that farms are both homes and businesses, the government will create a more realistic pathway for rural New Zealanders to enter farm ownership.

With the changes in the legislative pipeline, if you are considering farm ownership, now is a good time to start planning and take advice on how best to position yourself. 

 Read the full issue here