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18 May 2015
NZ government joins battle against Auckland housing market - ANZ
FXStreet (Bali) - Over the weekend, as the Research Team at ANZ notes, the NZ Government announced that it was going to join the battle against the demand side of the Auckland housing market.
Key Quotes
"The existing rule on taxing income from property trading now has broader criteria: the IRD no longer has to prove the property was bought with the intent of selling for capital gain; rather, a non-owner occupied property sold within 2 years will simply be assumed to have been bought for that purpose (with some exceptions, eg inheritance and relationship break- ups)."
"The new rules take effect on 1 October, the same day the new RBNZ lending restrictions kick into play. New rules about supplying NZ and foreign tax numbers will also allow accurate data on foreign property purchases to be collected for the first time. Will we see a rush of properties onto the market to beat the deadline? Possible reasons for selling fast: 1) exploiting a potential wave of purchasers aiming to beat the tougher deposit restrictions; 2) foreign property owners who don’t particularly want to reveal their tax details might decide to get out while the going’s good; and 3) price expectations may turn, meaning over-stretched investors may decide it’s a good time to take profit."
"The RBNZ’s clear expectation that banks will comply with the spirit of the new lending rules is likely to limit any demand surge from the first factor."
"ANZ will be putting out fuller analysis on the implications of the measures later today, but it seems it is going to be an interesting few months for the Auckland property market."
Key Quotes
"The existing rule on taxing income from property trading now has broader criteria: the IRD no longer has to prove the property was bought with the intent of selling for capital gain; rather, a non-owner occupied property sold within 2 years will simply be assumed to have been bought for that purpose (with some exceptions, eg inheritance and relationship break- ups)."
"The new rules take effect on 1 October, the same day the new RBNZ lending restrictions kick into play. New rules about supplying NZ and foreign tax numbers will also allow accurate data on foreign property purchases to be collected for the first time. Will we see a rush of properties onto the market to beat the deadline? Possible reasons for selling fast: 1) exploiting a potential wave of purchasers aiming to beat the tougher deposit restrictions; 2) foreign property owners who don’t particularly want to reveal their tax details might decide to get out while the going’s good; and 3) price expectations may turn, meaning over-stretched investors may decide it’s a good time to take profit."
"The RBNZ’s clear expectation that banks will comply with the spirit of the new lending rules is likely to limit any demand surge from the first factor."
"ANZ will be putting out fuller analysis on the implications of the measures later today, but it seems it is going to be an interesting few months for the Auckland property market."