Helping family into a home

Jennifer asks:
(updated on Friday, April 07th 2017)

I own two properties in Auckland. On one I built a minor dwelling on a few years ago. The other is 675sqm with a 80sqm home at the front.

My question is of wide range. I am wanting to help my daughter and son-in-law into a home. They are basically in no position to do themselves: she is a stay at home mum and he, although in the same job for 10 years, is still earning under $50,000. The goal is for them to own a second dwelling on the aforementioned property.

What would be the best avenue to take to get there? Do I build and own and take rent or can I gift them the back land so they own it? They are expected to be able to get a mortgage of $250,000 - which is enough to build the house as long as the land doesn't cost them. But I've learnt they can't use their KiwiSavers in this situation. Any advice would be appreciated.

I only have three years until my properties are all freehold so equity isn't an issue, aside from the obvious risks. Am I right to believe that you can't subdivide once a second dwelling has been built?