New Auckland Mayor Phil Goff's push for a foreign property buyers tax is a no-go for National, but not necessarily for all its coalition partners or the Opposition

By Jenée Tibshraeny

John Key is keen to pull down Auckland Mayor Phil Goff’s foreign property buyer tax sails before they gather wind.

The Prime Minister is refusing to consider introducing a 15% Vancouver-style tax on foreign property buyers, with Goff saying he wants central government to impose the law on existing homes across the country. 

Speaking to Radio New Zealand’s Susie Ferguson on Monday morning, Key said Goff should focus on increasing Auckland's housing supply through the Unitary Plan.

“That’s what he can do, rather than probably worry too much about fictitious arguments [about foreign property buyers pushing up house prices] that aren’t necessarily factually correct.”

Key said Goff needed to have a “fair discussion with the Government”.

It’s not just what central government can do; what can local government do? What is he prepared to do as mayor?”

Goff just short of having majority support for tax in parliament

While ACT and UnitedFuture support National in its opposition to a tax on foreign property buyers, its other coalition partner, the Maori Party, is sitting on the fence.

“Ideally, we would prefer it if property buyers lived here as the Maori Party does not support foreign ownership of property in Aotearoa,” it told interest.co.nz.

Meanwhile Labour, the Green Party and New Zealand First have been more vocal in calling for the Government to ban foreign property buyers altogether.

So if the Maori Party's two members of parliament support the introduction of a Vancouver-style tax, it would have support from 60 MPs, while 61 would be opposed. 

The Maori Party explained its position: “We would need to look at whether the tax increase will actually make housing more affordable or will it push foreign investors to spend more on a lower value part of the housing market?

“By moving in to a cheaper portion of the housing market, there may be little housing affordability relief as some relatively more affordable housing increases in price, and with lower tax revenues than expected.

“The housing market may also simply shift location as a result of the 15% tax increase. Increased land taxes could cause decreased sales volumes, and the foreign investor may look elsewhere to invest. House prices could increase further but somewhere else. What happens then? Do we apply this tax everywhere?"

Goff: 'I hope that they’ll show some flexibility'

The just-elected Auckland Mayor on Saturday told The Nation’s Lisa Owen: “Vancouver, a couple of months ago, decided they'd put a 15% property transfer tax on foreign investors who didn't live in Vancouver. That is already producing good results.

“It's supported by the Governor of the Reserve Bank of Canada, the Prime Minister of Canada, and my first argument to government will be, 'Think what most New Zealanders are asking at moment. Why is it that when we allow foreign investment to come into New Zealand into the housing market we don't require them to invest in new housing, which is producing additional housing for New Zealanders, not simply pushing the rate of inflation up?' It's a good question.

“I'm really interested to know what the government's answer is in declining to do that at the present time. I hope that they'll show some flexibility on that, as, indeed, I'll have to show some flexibility.”

Goff said central government had to take some responsibility helping Auckland absorb the net 800 people coming to the region every week.

Key: For a demand-side model to work, you have to hit the right target

Yet Key said he would need advice on whether a tax on foreign property buyers would contravene New Zealand's free trade agreements. (Here's what University of Auckland senior lecturer in economics, Ryan Greenaway-McGrevy, said about this in his interest.co.nz series on the Trans-Pacific Partnership Agreement. And here are EY's Aaron Quintal and David Snell's takes).

Key also referenced the controversial Land Information New Zealand (LINZ) data, which critics say under-estimates the number of foreigners buying property, as it excludes students and buyers on temporary work visas. 

Key went on to say: “Where there’s often confusion is a person who’s… of Asian ethnicity turns up at an auction at the North Shore of Auckland and people say they’re a foreigner, but actually they’re working here, living here, could even be a second, third, fourth generation kiwi…

“For any demand-side model to work - and generally the history shows you they work temporarily and not for very long - they have to be hitting the right target, and if the number of non-aligned, non-New Zealand buyers are not very many, then you’re not going to have much impact.”

ACT, UnitedFuture: Anti tax on foreign property buyers 

UnitedFuture has largely echoed National’s sentiments, saying: “Data on the impact on the housing market is limited with LINZ data showing 3% of property sales being attributed to foreign buyers.  

“While the data is not as robust as it needs to be to create a fully informed picture UnitedFuture is not prepared to commit to a tax based on geographical status because of anecdotal evidence that is being used to supplement robust data by some.

“Even overseas case studies, such as the recent Vancouver foreign buyer tax, provide an inconclusive picture of the impact of such a tax. The tax certainly resulted in fewer foreign buyers, but the market appears to have remained a seller’s market that has not delivered the result of more affordable housing for the young families who need lower prices for their first home. 

“In light of that, it would be worrying indeed if policy in New Zealand was driven by political narratives that cast an “us vs them” narrative. The likely impact of that is to strengthen the voices of those who attempt to undermine the openness and diversity of New Zealand, that kind of gateway intolerance is unacceptable.”

Meanwhile ACT has told interest.co.nz it does not support a tax on foreign property buyers, because: “As a matter of property rights, New Zealanders should be able to sell their property to the highest bidder without government interference, just as New Zealanders should have the right to purchase property overseas without interference.

“Foreign direct investment, including property purchases, provides a valuable cash injection for the New Zealand economy.

“Negative effects on housing affordability only appear in areas where there are artificial constraints on land supply, such as in Auckland via the metro-urban limit. It is these constraints that should be removed by the incoming Mayor.”

Labour, Greens, NZ First: Pro ban on foreign property buyers 

The Labour Party told us: “We have no immediate proposal for a tax.

“Our position has been clear that our policy is for a ban on offshore speculators (those who do not live here, have no right to live here or intention to live here) from buying existing residential property. This would cover the people who would be targeted by a tax.”

The Green Party has said its policy is to “Only allow New Zealand citizens and permanent residents to purchase land in New Zealand.

“In principle we would support moves by the new mayor of Auckland to fix the housing market and make it fairer for first home buyers, which could include investigating taxes on overseas investors.”

New Zealand First also has a policy to ban foreign property buyers. It said: “New Zealand First’s long held policy to address this issue is to apply, as many other countries do, stringent rules against offshore buyers.

“Mr Goff’s policy is without detail whether it applies just to the future or is it retrospective, and is it just for Auckland or the whole country.”

Sales down, prices on hold in Vancouver  

There’s been a significant drop in the number of homes sold in Vancouver since the British Columbia Government on July 25 announced the implementation of a property transfer tax of 15% on home sales to foreign buyers.

Data from the Real Estate Board of Greater Vancouver shows 2,253 homes were sold in Metro Vancouver in September - a 33% decrease from the same month last year and a 10% drop from August.

September’s sales volumes were 10% below the 10-year sales average for the month.

Yet the tax hasn’t brought prices down.

According to the Board’s MLS Home Price Index, the composite benchmark price for a home in Metro Vancouver was $931,900 in September. This was 29% higher than September last year, but only 0.1% lower than August.

The Board’s president said: “Changing market conditions are easing upward pressure on home prices in our region.

“There’s uncertainty in the market at the moment and home buyers and sellers are having difficulty establishing price as a result.”

Yet the Canada Mortgage and Housing Corporation has cautioned that while it’s still early days, “preliminary analysis of resale data suggests the market was slowing down prior to the tax’s introduction".

“Prior to the tax’s introduction, Vancouver was seeing a slowing pace of sales, an ongoing market shift to more condominium sales and a downward trend in average prices," it said.

“MLS sales declined following the start of the tax, continuing an already established trend, particularly at the higher end of the price spectrum.

“While MLS House Price Index Benchmark prices have remained stable, the average price has declined, partly due to a change in the mix of homes sold.

“Foreign buyers and/or foreign capital are among many forces driving home sales and prices in Metro Vancouver. Economic and demographic fundamentals, combined with housing and land supply constraints drive housing activity and home prices.”

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97 Comments

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Finally someone with a backbone! Phil you've got my vote and not surprising that Key will try to prevent any foreign buyer tax from happening.

Though if Mr Key is right and that foreign buyers only make up 4% of the Auckland property market then this new tax should have very little impact, so not sure why he's so defensive? Could the number of foreign buyers be much larger then he's willing to let us know about, What are you trying to hide Mr Key?

"The Prime Minister is refusing to consider introducing a 15% Vancouver-style tax on foreign property buyers, with Goff saying he wants central government to impose the law on existing homes across the country".

Ironically it was Phil Goff who signed the FTA with China which includes this: Article 139 requires that investors of [China] be treated no less favourably than investors of any third country [Australia] "with respect to admission, expansion, management, conduct, operation, maintenance, use, enjoyment and disposal" of investments. http://www.stephenfranks.co.nz/house-buying-ban/
So surely he needs to take some responsibility?
And yes if foreign property buyers only make up 4% then what's the problem?
Could it be that this 4% doesn't include foreign nationals on student visa's?

They can probably get around that by putting a tax on all foreigner buyers. This isn't about China, even though the media seems to have made it a race thing for some reason. It is about all overseas buyers blocking NZ buyers, due to being able to afford to pay more..

Backbone? Amazing what he can say as Mayor that he wouldn't say while MP

You can only assume Labour are in on the housing ponzi as well?

They wonder why no one votes any more.

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As usual, Mr.Key is all out to support his elite foreign mates over his own country folks!!!!!

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Of course we all know those statistics were completely shoddy, given that about 1/3rd of buyers were students with NZ tax residence (and so weren't classed as foreigners). Poor reporting from the media meant that National got away with it. But even if those numbers were correct, then where is the downside in imposing a 15% tax? I just can't understand the political capital being spent in denial mode here, unless National suspects that the whole property market implodes if they try and alleviate demand from offshore.

I had to laugh at the new mike pero RE ads "we sell for kiwis to kiwis", I'm sure if a big wallet walks in the door from overseas they will sell

There is political capital being made by National on supporting the rights of property owners to get the best price for their property. NZ is an open capitalist society where people's property rights are protected. Any restriction on those rights (i.e. by limiting the market) need to be considered.

This hysteria around foreign buyers is big talk in the media and these forums but that does not make it a political winner (especially with National voters) as it is seen as another form of wealth transfer (i.e. from property owners to NZ wanna be property owners).

Not all of the foreign buyers have been counted, I am pretty sure you know that. And given this free market on existing houses has ruined home ownership for many, I don't think your "right" to the highest price counts.
If foreigners could not buy, prices would better reflect what locals could pay and you would be able to sell and buy again on THAT same market.
Greed, we have discovered, is most definitely not good, so stop promoting it.

On your rationale we should stop all exports as they promote competition for NZ buyers. I would love to pay $1 for a 2 litres of milk but those damn foreign buyers are driving the price up. An export ban on all dairy would stop those greedy dairy farmers rogering NZ consumers. I trust I have your support?...

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When the eff did houses become an export item? They aren't, their primary purpose is to house people IN NEW ZEALAND.

Nice sophistry, HeavyG.

How is the argument fallacious? Surely feeding hungry babies is more important than someone wanting to buy a house (especially when they already have a house, albeit rented or state provided). If a family cannot afford baby formula because the price has been driven up by exports to foreign buyers that is creating unnecessary suffering for kiwi babies. The greedy farmers should be required to limit (or even better cease) all exports to ensure there is reasonably priced milk available to feed our hungry babies.

Or is your greed standing in the way of doing what is required to relieve child poverty in NZ (https://www.unicef.org.nz/learn/our-work-in-new-zealand/Child-Poverty-in...)?

You are coming up with some daft arguments to justify protecting yourself. Again, houses are NOT an export item!!!!

That argument doesnt stack up. Get house prices down to reasonable affordability and we wont need infant formula. Women can stay home and breastfeed if they want to, because they wont have an 800k debt hanging over their baby. The farmers can continue to sell their low value product to China.

Who buys a house with an $800k mortgage and cannot afford to buy infant formula for their baby. Why wouldn't they sell the house?... (Especially to an Asian for a tidy profit;)

That's the problem with your argument, you deem people to be in poverty because the cannot buy that $1m home in the best neighborhood in Auckland because they are only earning $2k a week (oh the humanity).

Does making wild exaggerations help to salve your conscience?

If a family cannot afford baby formula because the price has been driven up by exports to foreign buyers that is creating unnecessary suffering for kiwi babies. The greedy farmers should be required to limit (or even better cease) all exports to ensure there is reasonably priced milk available to feed our hungry babies.

Limited cases of your example would lead to benefits (subsidies) given to the needy. In fact we already do precisely that, e.g.
http://www.workandincome.govt.nz/eligibility/urgent-costs/food.html

However widespread and serious cases caused by large scale disaster, e.g. major war or famine, would lead to exactly what you seem to think is a facetious hypothetical. Of course domestic production would be turned, one way or another, to the benefit of NZ'ers, and exporters would be prevented from profiteering.

Pockets do you really believe there a free market in housing? There is a free market in big macs and the price has only gone up at a fraction of the rate of housing. Busy bodies running around making up special rules for houses and restricting the free market is what makes them expensive. Making more rules about foreigners just creates another pig sty of pen pushers. If someone wants a house here they will figure out how to get it - foreigner rules or not.

There is an absolute free for all in existing housing, which I think I qualified my argument with on another comment.

"existing housing". The market, free or otherwise, applies to all steps in the supply chain. Narrowing things to existing is about as meaningful as discussing the existing hamburger market.

Guess what, I don't care. Foreigners have NO place buying houses here, NONE! You can twist it and turn it any way you want to try and make some case for it to be okay for people of a country to be rendered homeless in order to follow your ideologies and protect your capital. You can "philosophize" till the cows come home, but people HERE need houses.

NZ sold it's soul long ago, maybe in the late 1990s

as it is seen as another form of wealth transfer (i.e. from property owners to NZ wanna be property owners).

*Any* change in real value of residential property represents a (unearned and undeserved) wealth transfer; historically in NZ it has always from the young (future house buyers) to extant land owners by way of constantly inflating values.

...people's property rights are protected. Any restriction on those rights (i.e. by limiting the market) need to be considered

Property rights only relate to title, how dare any landowner imagine he has a "right" to inflation or even maintenance of the $ valuation of his title!

Indeed the only "right" that could ever be properly justified would be the suppression of properly value inflation in the interest of maintaining a long term flat trend, which is clearly necessary (and in fact will always occur over, given enough time). This would be in terms of a "right" of the population to affordable housing. But also justifiable in terms of social cohesion etc in recognition of the huge damage done by volatile property price movements.

This hysteria around foreign buyers is big talk in the media and these forums but that does not make it a political winner (especially with National voters)

That's probably true for now, as the extant land owners are selfish and both socially and economically ignorant - not to mention woefully uneducated of history, especially in l'il ol' NZ -- but the rubber band can only be stretched so far before it is snapped. NZ is presently trending toward a country of landed elites and a renting subclass of peasantry. This situation will be resolved one way or another, eventually; either our elected govt honors the social contract in response to increasing voting pressure, or the mob will eventually force things the old fashioned way.

And we finally reach the logical conclusion of all your rhetoric, threats of violence if wealth is not transferred to the "needy" (i.e. people who can't afford a 3 bedroom detached home in Remurewa (oh the humanity)).

Set up your "angry mob party", or perhaps "the guillotine party" and let's get this party started.

At the old exaggerations again.

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Vancouver style Tax is one of the promise that Phi Goff made during his campaign, that he will work for it and everyone knows that Chon Kee is not interested as is more keen and interested to protect speculators and overseas buyer than average Kiwi.

When Phill Goff made that promise, he must have been aware that he will have to fight for it as is no hidden secret that National Government under Chon Kee is in favour of the current housing prise rise as for them is a sign of prosperity and is not a bad problem but a good problem.

To cure, first one has to admit that their is a problem so to except anything from national government is no good and they in their arrogance and ego are not able to see the mood of the nation.

Phill Goff should go all out and am sure will recive the support of majority as hate to see when my tenant says that they will have to rent the propertry for the rest of their lives unless they leave Auckland - It is a real shame. Disapointing when people lose all hope and even stop dreaming.

Well make a NZ buyer's dream come true Reena, sell your rental property to a kiwi and give up your bourgeois ambitions. By refusing to sell to a foreign buyer you will ensure your sale price will be lower than market and therefore a boon to some lucky Kiwi. Give someone hope Reena!...

Wish We could :) but believe in Karma.

Hopefully next election will change things, however hard people who are being benefiting by current government policy of supporting speculators may deny or hope thatthings don't change.

Why can't you?

Heavy G. Wishing well being for all is different than donating everything and not planing for self. Do not uderstand why few people are not able to digest when wishing welfare and good for all. May be concisous pinches - guilt

This is what has happened in NZ - Greed is supreme.

I am just highlighting the hypocrisy when you want others to do the "donating".

If you want communism I suggest moving to Venezuela, then maybe your green eyed monster will be satiated.

I too have a house and do feel that house price should be controlled as have streched too far , does it mean that I have to sell my house or I will be a hypocrat.

Many people feel that governmeng is not doing enough to control the situation by tackling demand does it mean everyone should sell their house or are hypocrat.

Fail to understan the logic.

I too have a house and do feel that house price should be controlled as have streched too far , does it mean that I have to sell my house or I will be a hypocrat. --> I will ignore the bad English. But we are talking about Reena who has a rental property (and not just a house (assuming she does have one for personal occupation)).

Great comment in calling out the hypocrisy. Applies to many other commentators on this site. Own rental properties, call for housing prices to come down so that more people can buy, refuse to sell at a discount to "kiwi" buyers.

It is not hypocrisy if wishing a just society for all. I am lucky to have a rented property but that was possible earlier but not anymore. Wishing for a policy that support all Kiwi and not just elite few does not mean that one has to sell house and everything - Few people are so afraid of the house price fall that even the thought that house price may fall upsets them and lose all sense of logic and no EMPATHY. Real Shame.

The arguments are similar to our government, whenever any one talks about controlling house price, goes to extreme and say that we do not want 40% fall - No one is talking about 40% or 50% but for controlling. When people go to extreme is when they are at wrong and trying to defend the undefendable.

"It is not hypocrisy if wishing a just society for all. I am lucky to have a rented property but that was possible earlier but not anymore. Wishing for a policy that support all Kiwi and not just elite few does not mean that one has to sell house and everything - Few people are so afraid of the house price fall that even the thought that house price may fall upsets them and lose all sense of logic and no EMPATHY. Real Shame." --> it's not? Going by your logic, it is not hypocrisy if I wish for less environmental pollution (or going further, even scream for more environmentally friendly laws) yet simultaneously use loads of plastic bags and drive everywhere in gas-guzzling SUVs (as an example).

"The arguments are similar to our government, whenever any one talks about controlling house price, goes to extreme and say that we do not want 40% fall - No one is talking about 40% or 50% but for controlling. When people go to extreme is when they are at wrong and trying to defend the undefendable." --> stop trying to change the subject of your hypocrisy. Admit that you are a hypocrite; there's nothing wrong with that and most people are to a certain extent. Otherwise, ACT on what you genuinely believe and sell your rental properties below market value to help others OR hold your peace. Oh, and if you sell your rental property at an under value, I am sure it will help to "control" the housing prices. Give me a call when you are ready to act.

By this logic anyone who wants the house price to be controlled and if have rented property shouls sell the property or he is a hypocrite. What a logic. Some frasturation. Best to ignore.

You can still play the game while arguing that the rules are unfair. Selling your own property at a loss is a fart in the wind compared to what is needed and there is no logic in the pain only being suffered by those who recognise the problem. It's far more effective to make the arguments in public and try to convince the crowd that collective action is needed.

Only that the arguments do not hold water when you act contrary to what you advocate. I am pretty sure it is far more effective to ACT on the arguments you are making because the ACT itself is the argument - put your money where your mouth is.

How about someone arguing to reduce carbon emissions, is their argument invalid unless they're a vegetarian who doesn't use electricity? This is a classic and tedious way to try and shut down debate, how dare you try to shut down an opposition view purely on the basis that they haven't taken an active decision to make themselves poorer. Frankly the argument is more compelling and honest when it comes from someone with something to lose, not only do they have skin in the game but they're decent enough to argue for the common good over their own asset value.

Oh so if one particular sports team does not like the rules of the game they are playing, they should play the game according to what they think should be the rules? Gee that's going to get them a long way, not. Sorry, but regardless of what you believe, you have to play the game in front of you according the rules in place, or you are on a hiding to nothing! Once you get control of the rules, THEN you can change them to what you believe are better ones. Your view is just another tool in the game of keeping the rules as you like them

NO but they are welcome to adopt the stricter rules (which are wholly encompassed by the regular rules) for themselves.

For example I may offer to play you at chess blindfolded and with 1 hand tied behind my back. I would be handicapping myself because I believed that it wouldn't be fair otherwise but I would not be violating any rules.

Be the change that you wish to see.

HeavyG & immigrant. Look up tragedy of the commons and stop being so dense. It's perfectly reasonable to advocate improvement of the system in the social interest while simultaneously benefiting from its current set-up. That does not make him hypocritical at all.

You need to look up the definition of "hypocrite".

Of course it may be reasonable to do so (i.e. advocate improvement of the system) in your own self interest simply because you are a hypocrite and you benefit from the existing set up. That makes you exactly a hypocrite. Not sure who is dense here and cannot get the differing concepts of hypocrisy and self-interest.

Let me give you a definition: a person who pretends to have virtues, moral or religious beliefs, principles, etc., that he or she does not actually possess, especially a person whose actions belie stated beliefs.

The self interested argument for a property owner would be to argue for increased or preserved house prices. Now that is an argument you can safely discount as transparent and selfish.

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Phil is a nice guy but he's also veteran politician. Chances are it's all talk..

Sorry but terrible journalism. Singapore introduced a Additional Buyers Stamp Duty in December 2011 to control the property market from overseas buyers. That has proved very successful in controlling the property market. By gradually implementation they have kept prices in a narrow range. It did take a year or so to really take effect.

Vancouver introduced the foreign buyers stamp duty in blind panic a couple of months ago. I believe time will tell but they have probably started a bust in their economy.

What is better a steady, measured response or a boom/bust one?

Anyway it should be referred to as the Singapore Model not the Vancouver one.

Magic Penguin, exactly what i have argued for. Balanced regulation means that the shift is gradual. The problem is most people are extremists, they automatically go to the worst possible outcome, and don't or won't consider the middle ground. Even the accountants and economists I know fall into this trap, and don't seem to know how to manage a gradual process. All or nothing and bugger the nay-sayers!!

Vancouver's tax is already having a massive impact. Going from 30%pa rises to a 0.1% drop almost overnight is a huge change. Saying it hasn't worked because prices have only dropped 0.1% is a total misrepresentation.

And don't forget that 0.1% drop is after a 20%ish drop the previous month

Check out the avg sale price graph @
http://www.zerohedge.com/news/2016-09-24/foreign-buying-plummets-vancouv...

Sorry, but your comment is just as misguided.

It was not solely the tax in Singapore which cooled the market. In fact, I would argue that the supply side ramp up had the most significant impact on anchoring prices. Plus, Singapore is a vastly different dynamic to Auckland in that it is effectively a city state. - One cannot easily substitute within the nation, so a regional tax had no effect on other intra country areas.

If you put a 'Vancouver' tax in place in Auckland, the demand will just be substituted to other areas of NZ. If we implement a nationwide tax, the effect will only be short term without a substantial ramp up of supply.

Taxes are not the answer. Supply response is.

It is worth noting that from implementation in Singapore it took 18 months before property prices started to fall. Prices in fact rose around 15% in that period.

Well people are very angry about being priced out of their own homes and we more than realise that over valuing property is forced young kiwis to either emigrate or face being rental slaves if they want to stay in NZ.

Not only that but it's really damaging from a business point of view; such as sending the NZD sky high and massively increasing the cost of living for our main cities, which makes it far harder to attract highly skilled and educated staff, as you would need to offer them far higher salaries. This eventually causing businesses failing and then closing.

We need to do something that's for sure.

Counter argument. People are very happy about how valuable their homes are. They have seen their equity, and therefore wealth increase. Any attempts to reduce these values will create hardship on property owners.

These high values are an indication of the demand for living in NZ which is referable to our high living standards. If people only emigrated based on the cost of living in a country then everyone would be moving to India or South Africa (see http://time.com/money/4229754/cheapest-countries-to-live/). However, people from those countries are flocking to NZ to live.

People who want to buy a house need to consider their options e.g. increase their income and or savings or look for a cheaper place in NZ to buy.

The property owners pain will be but a pin prick compared to the pain of those shut out. And those property owners will become fewer and further between, but you know, you will still have only one vote per person, not one per property you own. Time for the worm to turn.

Well I have to disagree with you HeavyG. I have been through a property crash not so long ago in the UK and all you have to do is ride it out. There are plenty of ways to do that such as renting out rooms to support your mortgage etc... or renegotiating your mortgage terms, it's not that hard.

And I think you'll find there are other reasons why people are emigrating here and it certainly isn't for the house prices! At least we're a free country, free from oppression - well at least for now.

Leaving things to carry on as they are will just tighten the noose around our necks.

The flaw in your argument HeavyG is 'which people' Sure some "people are very happy " But lots are not happy at all. They count. Also consider there are some who have benefited, but can actually see that it's still been unfair.

Well,you certainly don't speak for me. My home(Mt Maunganui) has apparently risen by well over $200,000 over the past couple of years or so,but it doesn't make me feel an better off. Why? Because it's my home,where I live and not just a piece on some financial playing board.
I also have one small rental property,also at the Mt. and it too has risen sharply in value,but I have had the same tenant for over 6 years and I feel that I have some obligation to her.
I would love to see the tax system changed to make second properties significantly less attractive to investors.

Cue, this (again)
http://www.interest.co.nz/news/83557/pm-says-wary-policy-action-could-ca...
LET'S DO IT but like the Maori party I am concerned if it just local it will cause more harm elsewhere (more than foreign buyers are, anyway, other than in Auckland)

If national do nothing to slow the train down , we are going to see a train-wreck unfold

By doing nothing , the whole thing is going to implode later , more spectacularly than it will if they act now

Surely they know this .

Its a bit like Helen Clark sitting by doing nothing about the mess unfolding with Finance Companies which should have been legislated as Deposit Taking Institutions and been subject to Banking regulator oversight and regulations , and prudential lending , as well as restrictions on related party lending . A bank could never use a deposit from one depositor to pay interest to other depositors and dividends to shareholders .

Thats called a Ponzi Scheme

It was a slow train wreck and we can expect the same in Auckland's housing is we dont slow the train down

I think Auckland's property will collapse by the end of 2017

so house prices rise, then rents rise to cover the cost and now government spend will rise to help house people as thy can no longer afford to purchase.
I have been saying this all along the accommodation supplement will become another mill stone around tax payers necks, 2 billion and rising

Paula Bennett said it was also possible that the accommodation supplement - which subsidises rent for lower income tenants - could be reviewed.
The inquiry said the rental subsidy had not kept up with rising rents.

A couple of bits of confusion - rentals don't go up because prices go up. In fact prices have gone up despite relatively small changes in rentals. The small increase in rentals shows that Auckland's property price spiral is a speculative boom - not driven by excess demand as commonly reported.

However, you are right that the accommodation supplement is an anomaly. In fact the Government pays a significantly higher accommodation supplement for a $400 pw rental in Auckland over a $400 pw rental in the provinces. The result of this has effectively been a subsidy of industry moving to Auckland, which has contributed to the anomalous population growth in Auckland.

An appropriate starting point for Government intervention would be to subsidise employment in provincial New Zealand (or at least get rid of the subsidies of Auckland over other locations). Similarly, the Government should be moving out many Government agencies that no longer belong in Auckland - starting with the defence bases, prisons etc.

Why is every suggested intervention a tax intervention. Why not make it that only citizens can buy property. No tax involved.

Agree 100%, tax has never fixed anything..

I am guessing they don't because then they would get less slop in the trough.

If a tax on foreign buyers won't work, at least force them to buy new builds, this will at least help with the housing supply

So long as they don't then turn into landlords holding out their hands for govt subsidies in the shape of accommodation top ups.

If you are so against the accommodation top ups then just campaign to have them abolished. I doubt that you'll find many landlords opposing you.

Yes it would be good, landlords would then HAVE to meet the market, or better still make the person who benefits from it, apply for it, ie the landlord

Whats to stop an over seas buyer using a kiwi frontman to buy houses?

Crickets.

Maybe confiscation if caught out.

Key doesn't want his property value to decrease.

Previously he stated foreign buyers are only a tiny tiny fraction of buyers.

So, the emperor will be shown to have no clothes mayhap?

Correct, if the percentage of foreign buyer is low like pm says - why is he than afraid to impose tax for as per him if the percentage is low than affect of such tax will also be low so why be afraid.

Make it 20% so as to differentiate our position.
Also any private transfer of ownership for existing property should have the tax applied, all using the 25% rule for determining overseas control..
Also confiscation for trying to rort the tax.

Labour need to front foot the Van tax right now as at some point a day late and a dollar short National will introduce a weak and ineffective version to show they are "at the end of the day" on top of things.

For an example of this view the half baked Nat plan today to maybe reduce immigration by possibly up to 5%.

Well Done PHIL GOFF finally a politician that listens to the people.

For the 100th time...

- Remember in Australia Foreign Buyers includes Foreign STUDENTS & TEMP VISA WORKERS
- This group bought 13,500 homes in the last 12 months in NZ
- That is 30% of the Resident Buyer Sales in NZ

This makes sense right you send your children overseas to study (as you are wealthy) and get them to purchase a house while they are out there.

See the Australia Victoria definition below :

http://www.sro.vic.gov.au/foreignpurchaser

Foreign purchasers

You will be a foreign purchaser if you are a foreign natural person, a foreign corporation or a trustee of a foreign trust.

Foreign natural persons

You are a foreign purchaser if you are not:
•A citizen or permanent resident of Australia,
•Or a New Zealand citizen with a Special Category Visa (Subclass 444)

Foreign corporations

A foreign corporation includes:
•Corporations incorporated outside Australia, and
•Corporations incorporated in Australia if a foreign natural person, another foreign corporation or trustee of a foreign trust has a controlling interest in those corporations

Foreign trusts

A foreign trust is a trust where a foreign natural person, foreign corporation or in the trustee of another foreign trust, has a substantial interest in the trust estate of that trust.

Phil Goff for PM on top of Mayor of Auckland!!!!!!!!
The guy talks so much sense

LABOUR/GREENS announce this Vancouver TAx before National do

see the election bribes are flying in
-immigration cut 5k
- 30,000 new homes...

All talk no action government is talking again ... remember his 2007 speech

http://www.scoop.co.nz/stories/PA0708/S00336.htm

What does the Key government Stand for?

Crony capitalism.

I'd like them a lot more if they really embraced the free market rather rhan the crony system they favour.

And then they treat the electorate like idiots with these sorts of hypocritical bribes!!!!

LOWEST PURCHASE TAX IN THE WORLD AT THE MOMENT !

Government Debt and household debt ballooning since John Key came in power
Government Debt has grown 1000% from 10bn to over 100bn
Household Debt is approx. 250bn growing 8.8% p.a.

Time to tax
foreign student buyers
foreign temp worker buyers
foreign offshore buyers

Let them buy new properties tax free to encourage supply
Make the Tax rate effective ie 15% or more

Vancouver has worked
http://business.financialpost.com/personal-finance/mortgages-real-estate...

Foreign buyers dropped to one per cent of the Vancouver resale market after being as high as 19 per cent, according to a new report from Canada Mortgage and Housing Corp.

http://www.bloomberg.com/news/articles/2016-10-04/vancouver-s-1-000-a-da...

The tax has accelerated a slowdown that began earlier in the spring as prices reached eye-watering levels, said Wayne Ryan, a managing broker with Re/Max Holdings Inc. who oversees a team of about 100 brokers in the region. “From the peaks last April, we’ve probably seen a 10 to 15 percent correction,” in prices for detached homes, he said.

phil.goff@parliament.govt.nz

Email Phil. That is what we can do... the more times people hear this the better chance that this message will get through.

Why would we have a different foreign buyer definition to Australia ?
Who benefits from this current definition ? Real Estate firms, Banks, MSM ?
NZ and Australia have harmonised and joined their CA organisations... surely we can harmonise our FOREIGN BUYER DEFINITION to include students and temp visa workers .

Tell Phil and tell him you want the foreign buyer definition to be inline with Australia and include students and temp visa workers .. forget about this silly resident non resident definition we have.

http://www.sro.vic.gov.au/foreignpurchaser

You will be a foreign purchaser if you are a foreign natural person, a foreign corporation or a trustee of a foreign trust.

Foreign natural persons

You are a foreign purchaser if you are not:
•A citizen or permanent resident of Australia,
•Or a New Zealand citizen with a Special Category Visa (Subclass 444)

Didn't you mean phil.twyford@parliament.govt

To all who are concerned, email him and press him on the Vancouver tax. He is very responsive

Cheers the more the merrier....

I just want Phil Goff to understand that australia have a wider definition of foreign buyer unlike the slimmed down nz version which excludes the primary foreign buyers ie students and temp workers

For all those who think China is innocuous, and doesn't have some sinister strategies:

http://www.nzherald.co.nz/nz/news/article.cfm?c_id=1&objectid=11727001

Tony Alexander seems to think the Chinese are quite a big factor in the Auckland property market::

http://www.stuff.co.nz/business/84322204/all-predictions-of-an-auckland-...

(PS what a horrible, snide man he is:
"Enjoy if you have already bought. Despair if you have not," he said.

"And if you have put off buying because of one of the many incorrect forecasts that house prices were about to fall – whoops a daisy.")

Agreed, dancing on the misery of the middle class homeless problem. What a piece of work.

Agreed he calls out the problems never the solutions...

When have you heard him question the lowest purchase tax in the world or the fact that our definition of foreign buyer doeant include students or temp workers unlike australia...

When has he asked for a vancouver tax...?

He is just an extension of the bank he works for end of the day

I quit BNZ because of this man

In the herald
Last year 5739 were granted residency under the parent category, which had ranged from 4401 to 6364 over the last 10 years.

So 50/60 thousand parents in the last 10 years. Dont we already have an ageing society ?
Seems like madness bringing in more old people especially when the ability to pay for govt pensions in the future looks slim.

Good National election bribe however one does need to ask why this number wasnt reduced years ago....

Another example of Key sitting on an issue and doing nothing about it untill its time for an election...

Accommodation supplement goes to mortgage payers as well! You are actually more likely to get it if you have a mortgage. If you rent but have say 10k in the bank in savings you will not get the supplement. If you just bought a 200000000$ house and have no savings or other investments the govt will pay your mortgage. How cool is that?

The bank won't lend to you if you need the accommodation supplement to pay your mortgage.

yeh right. So why do banks lend to negative geared "investors"?

If your personal net income is say $250,000pa, just because you buy a property that is losing money every year ( before factoring in capital appreciation ) does not mean that you have not enough money to afford the property.

Negative gearing is a technique used to offset tax. You are unlikely to be able to negatively gear on bank interest alone given the current 40% LVR rules.

I don't see the relation between negative gearing and affording property at all!