The New Zealand government will introduce new rules tweaking the law in an attempt to curb property speculation many feel is driven by overseas investors.
Prime Minister John Key announced on Sunday that the Government planned a law change from October 1. The government plans on making residential property bought and sold within two years subject to a capital gains tax, unless it was the family home, inherited, or needing to be sold because of a relationship split.
With strong inflows of money into prime properties and first time buyers struggling to get onto the property market the New Zealand government have been forced to act.
Overseas buyers are being pinpointed by making them have a New Zealand bank account and tax number. The crackdown on foreign investors comes as Inland Revenue warns the government of the rising influence of overseas buyers on the property market, and in response to advertisements in countries like Hong Kong China and Singapore selling New Zealand as a favoured destination for its lack of tax.
Under the proposed changes the New Zealand Inland Revenue would assess any residential property bought and sold within two years as a profit-making venture.
