Land Information New Zealand (LINZ) has just released its much-anticipated first report on the tax residency of people buying property in New Zealand.
The report, which covers the period from January 1 to March 31 2016, shows that three percent (or 1158) of the 45,114 property transfers nationwide were to buyers with an overseas tax residency.
Of these, the biggest buyer group was from China with 321 property transfers. The second biggest buyer group was from Australia with 312 property transfers.
When it came to Auckland, out of 11,955 property transfers, four percent (or 474) involved a buyer with an overseas tax residency.
Of these, the biggest buyer group was from China with 276 property transfers.
However, LINZ chief executive Peter Mersi said the report was not a register of foreign ownership.
“That’s because tax residency is not the same as nationality.
“For example, a New Zealander living and paying tax in the UK who bought a house in New Zealand would be included in this information as having overseas tax residency.”
The report also shows that over the same period of time:
• 50% of property transfers involved buyers who have only New Zealand tax residency.
• 37% of property transfers involved buyers who did not need to provide tax information – most of these were to New Zealand citizens or residents who were buying their main home.
• 10% of property transfers involved buyers who did not need to provide information because their sale and purchase agreement was signed before the law came into force.
Trust companies and businesses have been removed from the data which could have had an impact on the three percent overseas buyer figure.
The data could have also been skewed by temporary tax residents in the New Zealand tax residency bracket.
Land Information minister Louise Upston said it wasn’t possible to read too much into just a quarter's worth of information.
“But the data indicates that overseas tax residents are behind a relatively small proportion of property transfers.”
Subsequent reports collected over time will allow the government to monitor trends in the tax residency of property buyers, she said.
However, Labour’s housing spokesperson Phil Twyford said the data was selective and ineffective.
“It doesn’t give an accurate picture because it was collected at a time when offshore speculators had temporarily deserted the market.
“As a contribution to the housing debate, this data is effectively useless.”
Last year Twyford released Barfoot & Thompson information which indicated that the percentage of buyers in Auckland with Chinese names, between February and April 2015, was 39.5%.
Even prior to that, the issue of overseas buyers, particularly in Auckland, was a controversial – and hotly debated - one.
For this reason, REINZ chief executive Colleen Moore thinks it is good news that the LINZ data on buyers is being collected.
It means a clearer picture is being put together so that more informed decisions can be made, she said.
“The three percent figure of New Zealand homes bought by non-resident buyers in the last three months is in the range of what we anticipated.
“For us, the most important thing is a lack of supply – more houses need to be built in Auckland and around the country to meet the challenges we face.”
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