New Zealand Eyes Land Tax
April 26, 2016 Taxation in New Zealand
WELLINGTON D.C. – New Zealand may levy a land tax in order to reign rocketing property prices.
In a televised interview over the weekend the Prime Minister of New Zealand John Key indicated that the government is currently evaluating the feasibility of enacting a land tax on properties held by non-resident taxpayers.
The tax is likely to be set at less than 10 percent, and will be charged annually on the value of the property.
As the valuation of the potential tax is only at an early stage, no details are yet available on the how the tax will be enforced, how the value of the property will be determined, and how the tax will be applied to properties held by companies or trusts.
The land tax is the latest proposed measure to combat the rapidly escalating price of housing in New Zealand, which has been attributed by some analysts to speculative purchases by offshore investors.
The Prime Minister added that before the tax is implemented, more data needs to be collected on property purchases in New Zealand, in order to determine whether offshore investment is really a cause of the rising prices.
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