Overseas buyer data fails to answer New Zealand housing crisis conundrum

The first ever official figures on overseas buyers of New Zealand homes were released Tuesday, but they raised more questions than they answered as the government mulls a land tax on foreign buyers to help tackle the country's housing crisis.

The figures from Land Information New Zealand (LINZ) showed 3 percent of home sales in the first three months of this year involved buyers who were overseas tax residents.

These buyers were involved in 1,158 transfers, and included 321 of the Chinese mainland tax residency, 312 of Australia, 162 of mixed tax residency, including at least one of the buyers with New Zealand tax residency, 99 of the United Kingdom, 51 of the United States, 36 of Singapore and 33 of Hong Kong.

Half of all buyers had only New Zealand tax residency, while 37 percent did not need to provide tax information for various reasons.

LINZ chief executive Peter Mersi stressed it was not a register of foreign ownership "because tax residency is not the same as nationality."

"For example, a New Zealander living and paying tax in the UK who bought a house in New Zealand would be included in this information as having overseas tax residency," Mersi said in a statement.

"We will refine the guidance on responding to these questions so we can gain greater insight into who is buying and selling New Zealand property," said Mersi, adding the next quarterly release was planned for July.

The government introduced measures in October last year requiring all non-residents and New Zealanders buying and selling any property other than their main home to provide a New Zealand tax number as part of the usual land transfer process with LINZ.

In addition, all those with overseas tax residency had to provide their tax identification number from their home country, along with identification such as a passport.

Land Information Minister Louise Upston said that while the government couldn't read too much into the figures, they indicated overseas tax residents were behind a relatively small proportion of property transfers.

"It's important to note this is not a register of foreign land buyers and it was not designed as one. But over time, this information will allow us to monitor trends in the tax residency of property buyers," Upston said in a statement.

However, opposition lawmakers who have long demanded a full register of overseas property buyers said the data was worthless.

"As a contribution to the housing debate, this data is effectively useless," housing spokesperson for the main opposition Labour Party, Phil Twyford, said in a statement.

"The fact that this data is so limited and the government has selectively released parts of it, underlines the need for a proper searchable register of foreign property ownership, as is the policy in Australia and the United Kingdom."

The opposition Green Party said the data would make New Zealanders trying to buy their own home even more frustrated as it kept them in the dark on the influence of foreign speculators on the market.

"If the government was on the side of New Zealanders trying to buy their first home, it would ban non-residents from buying here -- it's as simple as that," Green Party co-leader Metiria Turei said in a statement.

House prices in New Zealand -- particularly in Auckland, home to a third of the population -- are among the most expensive in the world and Prime Minister John Key has said the government could consider a land tax on non-resident home buyers in a bid to discourage speculators. Endit