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Argument rages over foreign buyer data

Debate over the presence of foreign buyers in New Zealand’s housing market has flared up once again following the release of new tax residency data.

Friday, November 18th 2016, 9:30AM

by Miriam Bell

The Land Information New Zealand (LINZ) data shows that people with overseas tax residency accounted for just 3% of the country’s property sales in the July to September quarter.

Over that time, there were 53,991 property transfers and foreign buyers were responsible for 1,431 of them.

LINZ deputy chief executive Russell Turner said this meant that 3% of sales involved buyers with overseas tax residency, which was the same as in the first two quarters of the year.

“Levels of property transfers involving overseas tax residents have remained consistent in these figures so far.”

In Auckland, there was a total of 14,988 sales in the third quarter and overseas tax residents were responsible for 648 of those sales.

This meant that overseas tax residents accounted for 4% of Auckland sales, which was a fall from 5% last quarter.

Chinese tax residents were the biggest group of overseas tax residents to buy property in both New Zealand and in Auckland.

They were responsible for 471 property purchases nationally and 372 in Auckland between July and September.

The data, which has now been released for three consecutive quarters, is gathered by LINZ for property tax purposes.

Turner said the figures are not a register of foreign ownership.

“Instead they can tell us about the tax residency of buyers and sellers, and the level of transfers involving homes.”

Land Information Minister Louise Upston also said the data is not a register of foreign ownership – rather it is intended to help the IRD ensure everyone fulfilled their tax obligations.

“This latest report, although based solely on tax data, does not support the opposition rhetoric of mass purchases by foreigners.”

However, opposition figures argue that the data is misleading and inaccurate.

This is because foreign students and temporary workers are counted as New Zealand tax residents, even if they are not planning to stay in the country.

Corporations and trusts are also counted as New Zealand tax residents in the data.

Labour Party housing spokesperson Phil Twyford, said that if students and temporary workers were included in the data, 13% of houses were sold to foreign buyers.

But the LINZ data as it is misled Kiwis into thinking overseas speculation is a smaller problem than it really is, he said.

“The public want full and transparent figures showing the number of non-resident non-citizens who are buying houses here.”

Twyford, who has long campaigned against foreign buyers, said non-resident, non-citizens should be banned from buying existing homes.

 

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