The Bill that will stop foreigners buying houses is due for its first reading in Parliament on Tuesday as the Government puts another flagship policy in place.
It will amend the Overseas Investment Act, putting residential sections into the "sensitive" category.
The effect of that will mean only New Zealand residents or citizens can buy existing houses.
Australians will be exempt because of the Closer Economic Relationship.
Foreigners will be allowed to buy land and build a new home.
Labour has long believed foreign speculators have been pushing up the price of houses, particularly in Auckland.
The previous Government did nothing to stop them, arguing that only two or three percent of sales were going to offshore buyers.
Labour, in Opposition, didn't accept those figures and said the way they were gathered was flawed.
The Government wants the Bill passed into law in the first quarter of next year.