Prime Minister Jacinda Ardern will review the penalties applied to KiwiBuild buyers who sell their home within three years if there is any hint of abuse.

Housing Minister Phil Twyford backed down on KiwiBuild rule breakers, lessening the penalty they face for flipping homes.

It was a big call to secretly change the penalty for selling before living in the home for three years from giving up 100 percent of a house sale profit to just 30 percent.

Newshub can reveal he didn't even run that past the Prime Minister, and understands she only found out about it while watching our TV story.

"Myself, Grant Robertson and Shane Jones," was Mr Twyford's response to who made the call.

Ms Ardern is unimpressed and ready to review it.

"If we find that there are cases where breaches are happening, then we will review whether or not that's an appropriate penalty," she told Newshub.

Mr Twyford backed his boss, saying: "If it was happening a lot, then we might re-look at it - and I think that's a pretty reasonable approach."

But it won't need to happen "a lot" for Ms Ardern to take action.

"Even a small number we'd want to go and have a look," she says.

Judith Collins says undermining her own Housing Minister is a bad look.

"I think the Prime Minister is telling us she doesn't have a lot of confidence in her own Minister's decisions."

KiwiBuild has tasked an entire team with checking no one breaks the rules. The monitoring will cost more than $500,000 every year.

"We're expecting, over the decade, 100,000 KiwiBuild homes - so that $580,000 I think's a pretty reasonable expense," says the Housing Minister.

But David Seymour doesn't agree.

"Phil Twyford could have built a family a whole extra house for the price he's going to spend just to see if people are following the rules."

The public didn't like Mr Twyford's rorters rule, but he probably didn't realise his boss agreed.

Newshub.