"KiwiBuild is now a full-blown middle-class welfare scheme with the Government allowing lottery winners to flip taxpayer-subsidised homes and keep most of the capital gain", says ACT Leader David Seymour.

Newshub tonight revealed that Labour has performed a remarkable volte-face on its election promise of requiring anyone selling a KiwiBuild home within five years to repay the entire capital gain.

KiwiBuild lottery winners will now only need to repay 30 per cent of the capital gain if they sell the home within three years.

"If middle- or upper-income earners are lucky enough to win a KiwiBuild home, they stand to keep tens of thousands in capital gains.

"Meanwhile, more than 600,000 Kiwi households rent. Most are locked out of the housing market and will never own a KiwiBuild home.

"Not only is this a poor housing policy, it should offend our basic sense of fairness.

"Instead of allowing a few lucky people a chance to cash in on big capital gains, Phil Twyford should be cutting red tape to allow more houses to be built, giving every Kiwi a shot at owning their own home."