Opposition pressure for land tax

  • 26/04/2016
John Key says a land tax could be considered, but isn't necessary right now (Newshub.)
John Key says a land tax could be considered, but isn't necessary right now (Newshub.)

The Government is being urged to impose a tax on foreign property buyers.

Prime Minister John Key on Saturday said a land tax on residential property bought by foreigners may be considered, but he didn't think it was necessary at the moment.

Opposition parties have been calling for action to curb foreign speculators who are cashing in on Auckland's overheated housing market.

They believe they're adding to the pressure that's forcing prices up, but until now the Government has said they're not a problem.

Mr Key's comments indicate the Government's attitude is changing.

"After years of denying there's a problem, it seems the Prime Minister might have woken up to the damage that offshore speculators are doing," said Labour's housing spokesman Phil Twyford.

"John Key should be taking action instead of random musings on a land tax."

He says the Government needs to ban foreign speculators like the Australian government has. 

Green Party co-leader Metiria Turei is also urging immediate action.

"The problem is here already, New Zealand families are being locked out of the housing market," she said.

NZ First leader Winston Peters says Mr Key is feigning concern and doesn't really think there's a problem.

"On this matter of land and house ownership going into foreign hands he has done worse than nothing," Mr Peters said.

"He's denied it while there's been an explosion of offshore purchases."

The Government is waiting for evidence of the scale of the problem before making any decisions, and it might not be far away.

Since October 1 last year, foreign buyers have had to supply their IRD number from where they are a tax resident, and New Zealand's tax authorities have the figures for the first six months.

The information could be published within weeks.

Mr Key says he doesn't know what they're going to show, but Labour suspects the Government already has an idea of what's going to be revealed.

Mr Twyford says Australia requires foreign property investors to build new houses.

"It's channelled $30 billion into new home construction in the past year," he said today.

Mr Twyford thinks that would be more effective than "some complicated land tax idea" Mr Key has floated.

Opposition parties have been calling for action to curb foreign speculators who are cashing in on Auckland's overheated housing market.

They believe they're adding to the pressure that's forcing prices up, but until now the government has said their impact is insignificant.

Mr Twyford says Mr Key wants to be seen to be doing something.

"It's classic John Key - just enough to get the issue off the front page."

The scale of foreign investor activity isn't known.

NZN

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