New Zealand Decides To Tighten Rules For Foreigners And Increase Property Tax
New Zealand has always adopted friendly policies towards foreigners enabling them to visit the country, start businesses and migrate with their families. Thousands of families from Asian countries have taken advantage of these friendly policies to migrate to New Zealand, get jobs, start businesses, buy houses and settle down. As a result, New Zealand has a large foreign population spread across its different cities.
The government of New Zealand recently announced that it was going to change its property policies for foreigners in Auckland to bring more market stability to Auckland’s real estate boom. The government has decided to impose a tax on all residential properties that are being sold within two years of purchase for profits.
Finance Minister Bill English stated that non-resident buyers will now be required to present an Inland Revenue tax identification number along with a New Zealand bank account. In a statement, English said that these new measures “will help Inland Revenue enforce existing tax rules, provide it with extra resources and ensure that property investors pay their fair share of tax — whether they’re from New Zealand or overseas”.
Residential property investors who want to buy houses in Auckland will now be required by the Reserve Bank of New Zealand to put down a minimum deposit of 30 per cent in order to be eligible for a mortgage. These new rules will come into effect from the 1st of October 2015. Foreigners who want to invest into Auckland’s real estate market without incurring all the additional taxes and documentation will have to do so before the 30th of September 2015.