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Govt 'could use a land tax to restrict foreign investment in residential housing'

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Fuseworks Media
Fuseworks Media

Prime Minister John Key told TV One’s Q+A programme that the government could use a land tax to restrict foreign investment in residential housing under any re-negotiated free trade agreement with China.

"Well, we always have the right to make restrictions on investment in New Zealand, firstly through the Overseas Investment Office, depending on the criteria."

"We don’t have the right to put on, funnily enough, a stamp duty, and the reason for that is that stamp duty was taken off the table, if you like, through the free-trade agreements we had not only with Australia and Japan, and that also includes Mexico."

But the Prime Minister said, "at the moment, we’re not trying to stop the investment coming in."

John Key said he doesn’t have any early indications on the numbers of foreign investors but that they are recording the numbers.

".. my gut instinct tells me that the buying that’s happening in Auckland and potentially around New Zealand, but let’s just take the Auckland market, in so much that it’s, say, Chinese buyers or buyers of other ethnicities, I think they’re New Zealand-based. So I think they’ve got residency. They may or may not have citizenship. So the number of buyers I think that wake up on a particular morning, live in Shanghai and say, ‘Look, I’m going to go and buy a house in New Zealand for a million bucks or less,’

John Key told the programme a land tax could apply exclusively to non-resident investors.

"..we wouldn’t do it specifically for a country. We wouldn’t say, ‘For Chinese investors, you’ve got to have a land tax. If you’re Australian, you don’t.’ If we were going to apply that sort of thing, we would apply it to offshore investors."

Q+A, 9-10am Sundays on TV ONE and one hour later on TV ONE plus 1. Repeated Sunday evening at 11:35pm. Streamed live at www.tvnz.co.nz

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