New Zealand Dumps Idea of Land Tax
May 11, 2016 Taxation in New Zealand
WELLINGTON – New Zealand will no longer consider a land-tax to be paid by foreigners, as new data shows that offshore investors are not to blame for sky-rocketing property prices.
In a radio interview on May 11th the Housing Minister of New Zealand Nick Smith said that the government will no longer consider implementing a tax on land held by non-resident.
The possibility of a land tax was raised earlier this year by the Prime Minister John Key as a potential means of fighting the rapidly escalating prices of property around the country.
The tax would have been levied at a rate of up to 10 percent of the value of any property held by a non-resident.
The Prime Minister added that the government may proceed with the tax if it was conclusively shown that investment by non-resident is shown to be a cause of the escalating house prices.
However, information released on May 10th indicated that foreign buyers may actually account for as little as 3 percent of buyers over the course of 2016, leading the Minister to say that there is no need to implement the tax.
Property prices have been a contentious issue in new Zealand, with homes in the country now being considered as some of the least affordable in the world.
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