Treasury recommends capital gains tax

The recommendations were part of a series of documents about loan-to-value restrictions, released today.

The Treasury analysts said the LVR move was the best available option for dealing with an excess of housing demand in the short-term, while policies to stimulate supply took effect.

But they said the capital gains tax and restrictions on foreign buyers would be good longer-term measures.

Green Party co-leader Russel Norman said his party had consistently called for restrictions on people from overseas buying property in New Zealand.

The Government is tinkering with housing supply while totally ignoring Treasury’s advice on ways to dampen demand that would make a real difference to first home buyers," he said.

"Restrictions on foreign buyers is a simple step that would help to dampen the housing market and reduce prices. It’s smart advice that the National Government is ignoring.”

He said his party supported a capital gains tax that excluded the family home.