By Bernard Hickey
Labour Leader David Shearer has announced a Labour-led government would restrict non resident ownership of existing homes.
Non-residents, apart from those in Australia, would only be allowed to buy houses off the plan or sections, as long as a house was going to be built on it, Shearer said.
“I will restore the Kiwi dream of home ownership that has slipped out of reach for tens of thousands of Kiwis," Shearer said.
"I don’t want to see our kids become a generation of renters,” he said, pointing to a 28% rise in house prices since June 2009.
"There are just not enough affordable homes. And overseas speculators are adding to the problem."
Shearer said many other countries including Australia, China, Singapore, the UK and Switzerland targeted overseas speculation in housing and "New Zealand’s lack of regulation leaves the door wide open for international speculators."
He said IRD records showed more than 11,000 overseas investors owned properties they didn't live in and an estimated 2,600 homes were bought last year by non-residents.
The policy was part of an overall package of housing policies, including a capital gains tax on rental property and a plan to build 100,000 homes in 10 years, he said.
Labour would amend the Overseas Investment Act 2005 to apply new restrictions on the purchase of residential property by non-residents.
"As in Australia, non-residents will only be granted permission to purchase a residential property if they intend to live here permanently or that purchase adds to our existing housing stock, e.g. building a new house," Labour said.
A non-resident wishing to purchase vacant land with a commitment to begin building a new dwelling within 12 months would likely have their application granted.
Students, skilled migrants and other persons temporarily resident in New Zealand for 12 months or longer will be granted approval to purchase a house on the condition that it is sold if they leave.
"Allowing people to ‘test the waters’ before moving here means we can still attract the talent our economy needs," Labour said.
"Any non-resident person found to have purchased a residential property without OIO approval could be forced to sell the property which may incur a loss."
It said a fine may also be imposed in some cases.
Australia, Denmark and Iceland all restrict non-residents from buying established houses, Labour said. "Hong Kong, Singapore, United Kingdom, Switzerland and China have all tightened restrictions or added stamp duties for non-resident buyers in the last two years."
Reaction
National Deputy Prime Minister Bill English said banning such non-resident buyers would make little difference to Auckland's housing market.
"This is a policy talking about 3-4% of buyers. A lot of people perceived as foreign buyers are actually New Zealand residents and New Zealand citizens. When you net off foreign sellers -- people who came here and went away -- then they pretty much net out," English told TVNZ's Breakfast programme.
"Messing around with tiny groups of buyers won't make much difference to the potential bubble. New houses on a significant scale will make a difference and we're legislating for that as we speak," he said.
English said a lack of new houses was the single biggest driver in rising house prices.
He said Labour's policy was a sign Shearer was under pressure.
"You're going to have all sorts of Green policies coming from a leader who's trying to save his own skin," he said.
"It's another example of the Greens leading Labour by the nose and reflects the pressure on David Shearer."
ACT Leader John Banks said Labour's announcement was "anti-investment, anti-immigrant and anti-Chinese."
“David Shearer has finally jumped the shark,"Banks said. "His xenophobia is as disappointing as he has been," Banks said in a statement.
“Labour’s strategy is to outflank Winston Peters in his campaign against the Chinese community in Auckland," he said.
“The best evidence shows that the housing shortage in Auckland is caused by lack of land supply for residential development. It is not caused by foreigners buying homes."
Green Co-Leader Russel Norman said he welcomed Labour's policy.
“We were very pleased when Labour adopted our policy about a capital gains tax excluding the family home, and likewise we are pleased that Labour have got on board with this policy," Norman said in a statement. "This is about making housing affordable for New Zealand families," he said.
(Updated with reaction from ACT's John Banks, National's Bill English and Green's Russel Norman)
94 Comments
It won't make any difference to the end result. Politicians always try to grab power on knee jerk populist sentiment, with no economic qualification. They know the dumb public can't remember past the last soundbite. For most people, bubbles are hardest to be rational about while they are happening; everyone will be wise after the event.
HALLELUJEH! Finally, someone actually prepared to do something about this! Sadly it may be too late as successive governments have chosen to sit on there hands while this whole thing has built up.
I trust that measures that will encourage them to GET OUT of the market as well will come into place and that we will have similar regulations to Oz to make us less attractive from there.
NZ for NZers!!!!!!!!!!!!
I'm dissapointed by Labour's desperation to ride the anti-foreigner train after decades of being for a more 'inclusive' NZ.
But it doesn't surprise me because it's only politics...elections are around the corner and the Reds are not fareing well....and if it were the other way around the Blues would be basting a roast on this subject!!!
Some commenting on "NZ for NZ'ers" would rather blast all "non-NZ'ers" (wtf is that anyway!!!)....with their Ray-Gun!!!
Move On!!
Nationalism/Racism is a separatist concept that is so out of touch with the world we live in....get used to it!!! ....the world has actually become an Oyster!!!.....
I lived for many years in the University town of Cambridge, in the UK.
The enclaves being setup there, primarily Muslim, but also East European, are rankling even the most liberal minded academics.
Immigration without integration, is why UKIP has done so well in the polls.
The infrastucture is being overloaded, the locals are resentful.
Current PM David Cameron has declarded multicultralism a failure.
http://www.bbc.co.uk/news/uk-politics-12371994
But it is too late for them. Once a critical mass of immigrants who won't intergrate is reached, it's all over red rover.
What is it with right whingers that they cannot seem to differeniate between migrants and non-resident foreigners, it seems to be they constantly fudge the two.
Immigration is a whole another question that needs addressing at another time and where this will come from is the need to address human overpopulation of the world, and stuffing NZ full of people will nothing toward dealing with that problem
At some point we need to realise that the world cannot sustain constant growth growth growth
.... or we could lobby our politicians to put in place policies which allow the property development and construction industry to operate with less encumbrances , and get more houses and apartments built ...
Increase the supply ......
Been reading Hugh's stuff ... clever fellow that ..... Pavletich for Mayor of Christchurch !!!
"How come you've got actual statistics when even the govt doesn't have them"
So what are you basing your comments on? Raegun went to a auction room and saw Asian faces... Guess what, Auckland has a large, resident, asian population.
If there are no official statistics on foreign buyers how can you say they are, or are not, a big factor.
If it wasnt for the disaster Hugh would create I'd be all for it, nothing like setting a real world example of a disaster, Chch is screwed anyway. Of course with 1000 votes nation wide a Libertarian isnt likely to get too far...maybe he should link up with Destiny church.
That you think he's a "clever fellow" doesnt surprise me in the least.
He seems to have disappeared off the Internet, his facebook page has been deleted, I wonder why.
regards
What makes you think Hugh is a libertarian? There's nothing uniquely libertarian about the policies Hugh advocates as they are used in about 100 cities in the United States and were used in New Zealand before 'smart growth' took hold a couple of decades ago. And please explain how he would create a disaster, let alone one worse than the current disaster in Christchurch.
What about the expectations of further house price rises given Nationals open door policies (one million more Aucklanders)? I think Joe Public will remain skeptical of the land supply meme - described as a developers ultimate fantasy.
Labours lack of basic analysis is astounding , only 11000 properties out of probably 2,000,000 title deeds in New Zealand are owned by foreigners.
Thats a 0,005%, which statistically, is insignificant
There is no way 0,005 % of foreign buyers can influence the property market to the extent it has risen.
The cause of the housing inflation problem is complex and includes:
1) Supply constraints in the restrctive laws keeping Auckland from growing ,and horrendous council levies and fees on land development
2) Cheap money making buying a home cheaper than renting
3) Our immigration policy which encourages migrants with skills or money or both , who settle in Auckland and want a home when there is already a shortage
As to foreigners buying property as investment , we are not told where they are , but I would suggest that many of these foreign owned properties are in places like Queenstown or on Aucklands quay waterfront which most middle income Kiwis cant afford to buy or rent anyway
Talking of analysis, GBH said 11000 out of ones over 1 million? and not 11000 out of 2million houses?
How many are over 1million?
"More than 40,000 houses in New Zealand have a price tag of more than $1 million, says Quotable Value, and almost three quarters of them are in Auckland." lets say its 44000...
http://www.stuff.co.nz/business/money/7929078/Where-are-NZs-million-dol…
Interesting what you can do to the data.
We are 13000 homes short in Auckland per year, 2600 of what there is was bought by foreigners, roughly 20% of what we need. It would be easier to built 10000 homes than 13000.
regards
Point of Correction. As I understand it, the IRD figures that the 11000 figure comes from are that 11000 foreign investors own properties. This is not the same thing as foreign investors own 11000 properties, as one investor may own more than one property.
From the same release, an estimated 2600 properties were bought by by offshore property speculators. From REINZ there were around 74000 houses sold in 2012, which suggests about 3.5% of the market. The question is then, how much does it take to be impacting overall prices. If this buying is regionally concentrated, it could be much more than 3.5% in some places, while less in others.
Where have you been hiding? You musn't have see that Sunday program on TV showing a Barfoots auction, showing the bidding process, where a certain inscrutable lady only began bidding at the very end, blowing everyone else out of contention. Blitzed them all away. Definite. Absolute. Certain. Knew exactly what she was doing. Very inscrutable. Definitely wasn't pakeha.
Yes , xingmowang , what if crazy AKL house prices are due to lack of new properties being built ....
.... and what if the solution to that undersupply was easily remedied .....
And no need for the resident xenophobes at interest.co.nz to come out screeching about overseas investors .....
As raegun implies, a good start.
The suggestion of using fines for non-compliance should be enough without defining the amount. If used, fines should deter all those who flout the rules and be very heavy for devious schemes.
However emulating the Australian system is impossible without a tax equivalent to their stamp duty. As the last out of the blocks we need a heavier disincentive than our competing countries.
To assist the overall housing situation in Auckland in particular , immigration should be balanced out over a period which could mean virtually no immigration until we can cope again.
Fulla holes ya could drive a Cat D7 through. Common taters can no doubt thinka some more...
- Purchase via a 49% foreign owned company but with 100% of the munny being advanced from offshore.
- Purchase via a Trust with a NZ frontsperson but foreign trustees, beneficiaries
- Purchase via a 96 year old NZ'er whose will, quelle surprise, leaves the lot to a Person from Somewhere Else along wiv a cash bribe to the fambly
- Purchase via a 2 yr old NZ born child with guardians who are ... but ya gets the idea by now (unless yer David Shearer)
This will be an absolute field-day for legal eagles, immigration consultants, trustees and nominee companies, and in general a whole lotta Birds Of Prey.
Unintended consequences, folks....
Ex Labour Party president Mike Williams says that we will see a flood of Chinese buyers try to beat the possible Labour led legislation followed by a drop off.
If I were a Chinese (or other foreign) buyer, I would be running scared right now because not only can any legislation catch existing owners who would not comply and still have to sell up under the rules, but they would want to get out in a stagnant market (which is one possible outcome)
When they say 11000 homes are foriegn owned... what does that include..???
There are many structures... ie. trusts , companies etc..etc..
I'm guessing it might need more than looking at IRD records to determine how many Houses are foriegn owned..??
This is outside my area of knowledge....so just asking the question..???
At a guess, the figure of 2600 homes bought by by offshore property speculators (compared to 74000 sales) in 2012 was probably derived from an Official Information Request asking for sales to Identifiable offshore people. I imagine you could ask a similar question to the offshore buyers asking about identifiable local buyers. The true figure for foriegn owned would likely be between 2600 and (74000 - identifiable local buyer).
The IRD could start by making sure all property titles have at least one IRD number associated.
I would have a bet that our wonderful law makers and servants of the people have no such sophistication.
A great way of obtaining a potential taxation base for the future???
Law of unintended consequences. NZ has had massive deregulation from 1984 onwards in the hope that the world will be one big even playing field, but it has not happened. A lot of deregulation is highly idealistic and has ended up with us being closer to a free market while our "partners" still have protections in place.
Politicians make these law changes and are usually too stupid or lazy to figure out the consequences. yes as a policy it's slightly xenophobic, but its no worse than what numerous other countries already have.
The housing crisis does not have one cause, and therefore it will require more than one solution.
The numbers of foreign buyers is not really relevant, it is the values and attitudes that they bring. Imagine a place like Bali where local people buy and sell houses to each other for, say, $2,000 (I am making these numbers up). Suddenly, young Aussie/Nz surfers who are in Bali for a couple of weeks, realize that they can buy a beautiful house in Bali for what they could save in a few weeks working in the Aussie mines- so they buy a house, or a couple of houses or even a bakers dozen (13) houses! Why not? Why wouldn't you?$?- cheaper than a second hand car! - You have a cool place to visit for a couple of weeks and can rent it out to other surfers the rest of the time.
Now look at it from the perspective of the local people. Suddenly your $2,000 house's value is being set by Aussie/NZ surfers earning $3,000 a week driving trucks at an outback iron ore mine. Say there are 1,000 houses in a village- all of which had been bought and sold for about $2,000 amongst the locals over many years. Say $2,000 is an affordable price for local young farmers, and a fine price for local sellers. If one of those houses sells to a visiting surfer for $80,000, then suddenly every house in the village is potentially saleable for $80,000. Only a fool would sell a house to a young local couple with a new baby for $2,000. The point is that a relatively small number of buyers from off-shore can drive house prices through the roof for the local people.
I have been sounding my objection for those very reasons ever since I learned of American and Israeli interests buying Walter (pretty sure it was that and not Cecil) Peak way back when. Look where flogging all their precious real estate off to poms with sandals and socks and a knotted hankie on their heads has got Spain
Its an interesting contradiction, on the right we want employers who want to bring in cheap labour to undermine what a kiwi can ask for the job. Cheap labour is imported, said kiwi buggers off to OZ.
On the left we have the do gooders who want to allow 5 billion "poor" ppl in as they cant be left in squalor, result our own poor have to complete with migrants for a low and un-livable wage.
So both want the same thing, never mind that kiwi's lose out in this.
regards
Imagine if every Provincial, regional, town, and suburban rugby team, in every age grade, had to play in a single competition that included the all Blacks and the super 15 teams? What chance would the Dunedin Pirates Under 15 yo team have in such a competition? Or the University of Otago Women's 15? think about it, if you allow unregulated, gloves off, full on competition there is only going to be one result- the All Blacks get the kindergarden trophy and every other trophy at all levels as well.
We are a little friendly country. We are going to be/are being eaten alive by richer, more competitive societies, East and West. Ask any Maori (or read history) as to how that works out? Badly for 95% of the locals and well for the 2% of Quislings (collaborators).
Quite a good analogy, not only that the 15year olds try their best but get trampled and injured, they in future cannot compete at all as they are crippled.
These so called trade agreements do the same thing, pushed by the vested interests. End result, ppl with deeper pockets will come in and buy our food and anything else we have and we cannot compete. For instance, its interesting that in 2008 thailand? stopped exporting rice, Japan has to import rice, just where from? Thailand did it to stop riots as its ppl couldnt afford the prices the Japanese could pay. Fast forward to a free trade agreement, just how is that done BTW? bet you cant control your own produce anymore. We already lose good fish to foreign markets, whats left is chinese imports or too small to eat.....rinse and repeat.
regards
great comment. couldn't agree more.
It is not the colour of peoples skin that matter but rather the colour of their money
The whole Anti Chinese slant on things is just put out there to make everyone shut up as we do not want to be racist. But it has nothing to do with race at all. It is not the colour of peoples skin that matter but rather the colour of their money. People who operate inside the New Zealand economy cannot out bid players from other economies for land. This is a simple fact of life. In a democracy we do have the right to decide the rules. If we make it a rule that money from other economies cannot out bid our money for land then that is our right.
The arguements put up by Roger Kerr and the like are bogus.
They try to make it a race question when it is a competing economy question
They bring up Australia
They talk aboutinward investment and pretend that we have some. New Zealand actually has very little real inward investment. We have money flows- short term ( in and out quick) and money flows long term( into existing assets ) but very little into new risk enterprises. So we do notice when actual monet at risk capital inflows occur.
Key's role is to show he is doing his utmost to maintain the status quo - dirty money can keep coming while they buy our soft commodities. Understandable. Similar to Cyprus and Russia although that ended unfortunately for both.
If as the commentators say Chinese buying is not affecting the market greatly then their removal will not affect it either. We will simply be getiing in line with a lot of other countries, including China.
Commentary above asks if all the Chinese faces noted at auctions are actually foreigners or true blue Kiwis. If they are predominantly kiwis then critical mass has indeed been achieved. Coming next will be the ability to influence local and national elections. As my Singaporean friend says - Kiwis so dumb leh!
I guess it is fool's errand to work against the trend:
India + China is now having more than 25 bn people, and increasing. A tiny population spillover to NZ as a form of immgrants will change NZ's demographic. Is it not already happening in AKL, Sydney, Melbourn, and west coast of USA?
I guess NZ would be really dumb if not having policies to compete with AUS, Canada, and US to attract and retain the brightest immigarnts -- they may be the only hope for NZ to become a more balanced economy as opposed to Agri + Tourism oriented.
Both Labour and National have trashed NZ for 30 years with a toxic combination of Neo Classical Economics and Political Correctness.
The only thing I can think is to "punish vote", so which ever lying drop kick wins the next election has to sit there and make nice nice with a grinning Winston Peters.
I guess it is fool's errand to work against the trend:
India + China is now having more than 25 bn people, and increasing. A tiny population spillover to NZ as a form of immgrants will change NZ's demographic. Is it not already happening in AKL, Sydney, Melbourn, and west coast of USA?
I guess NZ would be really dumb if not having policies to compete with AUS, Canada, and US to attract and retain the brightest immigarnts -- they may be the only hope for NZ to become a more balanced economy as opposed to Agri + Tourism oriented.
"retain the brightest immigarnts"
How do you identify them? China is so corrupt they hand out fake qualifications and academic results to students as a matter of course so they can infiltrate 1st World Western educational institutes.
Anyone with money in those Asian "emerging economies' has obtained it via corruption. They then want to leave that 3rd world toxic atmosphere hell hole with their ill gotten gains and trash NZ where the welcome mat is out for them.
Of course because as we all know Thailand, Korea, China etc are just the epitome of Good Governance, Transparency and Political Freedom!
NZ society can learn so much and can only become more "culturally enrichened" by such "cultural practices" as witnessed in food processing in China.
Only an evil nasty RACIIIIST who hates gays would try to deny it!
The same reason the Political Correctness crowd rail roaded through gay "marriage".
"Multiculturalism" and "Diverse and Vibrant Communities!" is part of the propaganda campaign against the perceived "class enemy", namely Western, white, heterosexual men who are allegedly oppressing everyone else via the "patriarchy".
Basically the PC crowd are trashing Western Civilisation from the inside in the belief that they are bringing around some kind of "cultural revolution" to free the "oppressed classes".
There is no way that Labour's policy is Xenophobic anyway. More Poms buy houses here and they will be equally banned from ownership.
I would also like to see an annual property tax levied against little or non tax paying foreigners. They are enjoying all the relevant benefits that NZ tax payers are funding. They should also contribute to all the social costs as all NZ tax payers pay regardless of their needs. On top of that, they should pay an anual premium for the privilige of continuing to own property here.
I consider we need more immigration, preferably from east asia, to dilute the influence of ignorant foolish people like you. Have you been to Thailand or Korea?. Our soft corruption is every bit as insidious as the envelopes that grease the wheels in those countries.
Here is what has changed
Once upon a time, new zealand was a quiet back water, down here at the end of the world, happy in its isolation doing its number 8 fencing wire thing. If you were a taxi driver, or a labourer, or a ditch digger, and you suddenly acquired a $2 million house for cash, the IRD would be all over you, doing an audit, asking you to explain your wealth. If you couldn't explain the source of your wealth the Tax Department would assess you for tax on the deemed income that resulted in that wealth.
One month ago, there was a Sunday TV Program with an interview of several people, one segment was about a 21 year old chinese international student who was not a resident or a citizen who purchased 3 properties in auckland for a total of $5 million cash. No finance required.
Now, where would a 21 year old get $5 million cash from.
Do you think the IRD will be all over him to explain.
Do you think he has clean hands?
Or is it one rule for us and another rule for them?
What happens if Labour gets in power, passes the legislation and house prices in Auckland keep going up? Because that's exactly what will happen.
This is not going to address the supply problem. If foreign buyers do start selling up it will be a small percentage of the whole market and will be snapped up domestically, so you might get static prices for a few months before the real underlying causes (supply) are laid bare once again.
This problem is of our own creation; blaming foreigners is politically tenable and will get Labour votes but won't resolve anything.
Shamubeel has put it better than I can...
"New Zealand Institute of Economic Research principal economist Shamubeel Eaqub said yesterday that Labour's policy was a "solution in search of a problem".
"It's very easy to try and point the finger at ‘other people' . . . It reeks of xenophobia," he said.
Labour was trying to create policy without any fundamental basis that foreign buyers were actually the cause of rising house prices.
"It reeks of poor policy making," and was sloppy"
I'm not against it, or for it, until I see conclusive evidence that it is a problem.
And, the law of unintended consequences, if we're seen as xenophobic and racist it will damage our trade relationships abroad and I don't know if you've noticed but exporting is a pretty important part of our economy.
The easy solution
All new migrants of whatever ethnicity can only acquire property on the following basis
- (a) build a new house at least 50 km from the CBD in new subdivisions
- (b) meet the FULL costs of infrastructure of those new subdivisions
- (c) must hold it for at least 5 years, and
- (d) have paid income taxes for at least 4 of those years
and
- (e) all new migrants who have purchased inside the 50 km boundary within the last 5 years must meet those requirements and sell up any currently held property within 12 months or pay a $100k fee
That way the Labour party gets its 10,000 houses built for free.
How much does it cost, on an all-up per-square metre basis, to build a new home?....is STILL the real question. Forcing foreigners to invest in new-builds means they will still help bid up the price of land, which is the critical component of the game. Zoning their investment into a specific part of the market changes nothing. New-builds and existing stock are connected - fundamentally, they are the same market. And regardless, foreign impact is trivial - we will still, with or without them, have a crazy property market.
This policy changes nothing and achives nothing. Shearer is desperate and is going for populism.
Oh, and if we we're really clever, we could get China to build us some "ghost towns" on the fringes of Auckland. Fancy some really cheap rent? Get them to make us an over-supply. True market values of housing stock will (in time) be dictated by the ratio between the number of houses and the number of people living here. A bubbled-up over-supply would only crash down to super cheap houses for everyone, in the end. So maybe we should welcome as much Chinese investment as we can?....just make sure it turns into supply - not inflation. Easy done if you lose the MUL's.
Liam Dann at the Herald suggesting it might be called "xenophobic":
http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=10904640
The notion that it is xenophobic is bollocks. It is usually trotted out by neo-liberal ideologues. Just like John Banks.
Most countries have some degree of protectionism. Adoption of the Aus policy would not prevent foreign non-residents from buying new properties.
If providing some limitations on foreign property ownership is xenophobic then so is limitting immigration. Use the same logic and there should be no restriction on immigration - it should be one big free for all.
I don't agree that this policy would achieve nothing. As David Hargreaves says, anyone who thinks there is one or even two magic bullets doesn't understand the issue. The causes are multi-dimensional and by necessity so must the solutions be. This policy in itself will achieve only minimal benefits. In association with 4 or 5 other approaches it would achieve significant benefits
Yes, in an ideal world we wouldn't need this restriction. Capital would circulate freely and the housing market would respond with adequate supply. Unfortunately NZ has a number of strong disadvantages to achieving a large supply response, both natural and human-made.
Here's some brik-batts for the Houston solution:
But Glaeser notes that there are problems with Houston's sprawl: It takes a large amount of energy to make the area's humid, hot climate comfortable, and the city is built around the use of cars.
"Houston is among the five worst American metropolitan areas, in terms of its carbon emissions," he says.
And he acknowledges that for people who are concerned with environmental issues, Houston presents a picture that is beyond dismaying.
"I think horrendous wouldn't be too strong a word," Glaeser says.
'sounds like a great model for Auckland (except that Auckland is an isthmus).
The Herald is reporting that New Zealand has to treat China no worse than NZ treats Australia, according to the Free Trade Agreement with China, and that Labour's policy could be in breach of that. If the Herald were correct, then given the size of China, it could progressively buy up New Zealand and own the lot out of its petty cash.
The good news is that the actual agreement seems clear that The relevant clause in the FTA agreement does not insist on this, as it has in clause 139 the following:
3. Notwithstanding paragraph 1, the Parties reserve the right to adopt or maintain any measure that accords differential treatment to third countries under any free trade agreement or multilateral international agreement in force or signed prior to the date of entry into force of this Agreement.
I am sure that our arrangements with Australia have been around a long time. I note that I wouldn't particularly want Australia buying us up lock stock and barrel either, but they don't have the size, or apparent desire, to do so.
Lets say the next 12 months will be like the last 12 months and sees 2500 non resident purchases at avg $700,000 (yes they're richer than us).
It's simple to tax each purchaser. A 1% tax (peanuts) would put $7000 x 2500 = $17,500,000 into a fund to re-distribute back to "resident" first home buyers who qualify. Yes there's an admin cost but that's small we hope.
If 2500 sales are going to foreigners then perhaps 2500 will go to first home buyers also? That's a "$7000 gift" for our sons and daughters from our wealthy off-shore based lovers of everything NZ who weren't lucky enough to be born here.
Whinge, support or choose silence cos u shoulda thought of it?
Exciting when you think the tax could be set at 3%. Thats $21k per new home buyer. Who's whinging then? Only the people who don't live here and who used to take advantage of our predeliction to ignore our own residents best interests first.
If you are going to do it, be serious, get it right the first time
Forget the 1% and the 3%. Make it 15%
There are two target groups of buyers
- (a) The non-resident who is playing the Aotearoa Property Casino - no intention of residency
- (b) The butterfly-buyer who is "buying" a nz passport, using nz as a back door to australia
- (c) The butterfly-buyer will pay $1,000,001 for any property they can get their hands on
A 15% straight out tax (call it stamp duty if you must) on all property purchases and purchasers, but rebated or remitted and not collected from anyone who has a new-zealand passport or a new zealand birth-certificate. Forgeries not accepted.
Then you can play first-home-owner-grants till the cows come home, to nz born only
Labour has now produced 2 proposals in 12 months
(a) The 2012 capital gains tax (what happened to that?), and now
(b) The 2013 ban on non-residents, and
(c) The 2014 proposal yet to come .. what will it be?
I think everybody is missing the point, Labour want to introduce capital gains tax on housing which will hopefully equal the after tax margins between property as an investment and any and every other investment.
The measures don't go far enough to give Kiwi's lifestyle, if Auckland is to have quality of life then time spent in traffic has to be taken into account. What is the point building 10,000 new affordable homes a year if the homes are on the edge of urbanisation and it takes 1 1/2 hours each way in traffic to get to work.
I'm completely of the topic of your post Bernard, but when every I hear about affordable houses I think that we need city intensification with affordable apartments and in area's where public transport can be provided ecconomically.
Or, thinking only a leetle outside the box, why not a GST 100% rebate for houses bought by residents (those with an IRD number, a tax-paying history, and a deposit), and GST at say 25% on all the rest. The latter pays for the former, and 3/23rds of yer average build at say $350K works out to - um - $45K, which is not chicken feed.
Screws up the luvverly flat GST rate, but, heck, at the rate consents are issued in this benighted burg, a gang of pensioners with paper and sharpened HB's should be able to keep up. Might haveta pay 'em a Living Wage, but....
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