Sat. Sep 30th, 2023
    National Party Proposes Tax on Foreign Buyers of Kiwi Property

    The National Party of New Zealand has announced a policy proposal to allow foreign buyers to purchase homes priced at $2 million or more, with a 15% tax imposed on the sale price. The party estimates that this policy could generate $740 million in tax income annually. To achieve this figure, foreign buyers would need to spend approximately $5 billion per year on Kiwi property. However, before the ban on foreign buyers was implemented in 2018, they only accounted for less than 3% of all house sales in New Zealand.

    Although the National Party’s tax plan has been independently costed, critics argue that the projected figures may be optimistic. The party has not provided detailed information on how it arrived at these estimates. Finance Minister Grant Robertson has dismissed the calculations as “voodoo costings,” stating that it is unlikely that such a large influx of foreign buyers will materialize. The Labour Party has also raised concerns about potential conflicts with New Zealand’s double tax agreement with China, suggesting that Chinese buyers may not be subject to the 15% tax.

    If the National Party forms a government and fails to reach the promised tax revenue, it may have to consider alternative tax measures or cut costs in other areas. The proposal to allow foreign buyers back into the market may reignite debates about housing affordability and supply in New Zealand. Advocates argue that foreign investment can stimulate the economy and lead to job creation, while critics believe it may contribute to a housing bubble and benefit real estate agents and property investors rather than ordinary New Zealanders.

    Sources: Property analysts Valocity, Infometrics, Herald, Professor Craig Elliffe, National Party, Labour Party, Finance Minister Grant Robertson, former National finance spokesperson Amy Adams, former Prime Minister Sir John Key, luxury real estate agent Ollie Wall, University of Auckland property lecturer Michael Rehm.