Foreign buyer song remains the same

Land Information New Zealand (LINZ) has just released its latest data on the tax residency of participants in property transfers and it doesn’t contain any surprises.

Over the January to March 2017 quarter, there were 41,919 property transfers in total.

People with overseas tax residency were responsible for 1,275, or three percent, of those property transfers.

This was a slight lift in the amount of overseas tax resident buyers as they made up just two percent of the total in the last quarter of 2016.

However, the LINZ data series reveals a consistent level of property transfers involving overseas tax residents.

Since LINZ first started releasing the data early in 2016, the number of people with overseas tax residency has hovered at three percent.

The drop to two percent in the last quarter of 2016 was the exception to the trend.

In Auckland, there was a total of 11,079 property transfers in the March quarter and overseas tax residents accounted for 519, or five percent, of those transfers.

Again, this represented a slight rise in the amount of overseas tax residents as there was four percent in the two previous quarters – although the figure did come in at five percent earlier in 2016.

Overall, 57% of property transfers involved buyers who have only New Zealand tax residency.

The other 40% involved buyers who did not need to provide tax information, most of whom were New Zealand citizens or residents, according to LINZ.

The latest report also includes data on the citizenship and residency of those involved in property transfers for the first time.

LINZ deputy chief executive Russell Turner said that last year improvements were made to the tax statement it uses to collect data for property tax purposes.

“Last year we made improvements that mean we now have better data about the citizenship and residency, of people involved in property transfers, for housing policy purposes.”

This data shows that in 82% of property transfers, one or more of the buyers involved were New Zealand citizens or residents.

In just two percent of property transfers, buyers were people without New Zealand citizenship or residency – although some had work or student visas.

The remaining 16% of property transfers involved represented corporate or business entities. For almost of all of these corporate/business entities all parties were New Zealand tax residents.

Labour Party housing spokesperson Phil Twyford said the data was misleading and partial and couldn’t hide New Zealand’s problem with overseas speculators.

“One house being bought by an overseas speculator in the middle of a housing crisis is too many.”

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