New targeting of property investors has been welcomed by Labour and the Green Party.
But both say the tough new Reserve Bank proposals to require investors to have a 40 per cent deposit will not be enough to slow rapid house price increases.
Labour's finance spokesman Grant Robertson said the message from the Reserve Bank for greater Government action was clear.
"John Key keeps calling on the Reserve Bank to get on with it. Meanwhile, he's in denial.
"They [the Reserve Bank] can only do so much...what is lacking here is a Government prepared to step up in terms of controlling demand."
Labour policy is to ban foreign buyers, extend the "bright line" test to five years so investment properties on-sold within five years have to pay a tax on the capital gains achieved, fast-track the building of affordable homes and begin consultation on ending negative gearing.
Negative gearing allows landlords to claim tax deductions on losses on their rental properties.
Green Party finance spokeswoman Julie Anne Genter said the Government needed to "remove the tax advantages of property speculation".
"The National Government is still the property speculator's best friend - this Government has made it easier to buy a third, fourth, or fifth house, rather than your first."
Green policy is for a capital gains tax on all properties except the family home.
Reserve Bank Governor Graeme Wheeler today released proposed new urgent restrictions that will mean property investors across the country will need a deposit of at least 40 per cent.
He said banks should immediately "observe the spirit" of the proposals, which would also require owner-occupiers to have a 20 per cent deposit.
It will consult on the changes until August 10.
The Reserve Bank introduced LVRs of 20 per cent in 2013 to rein in the housing market, and in 2015 it raised the limits to 30 per cent for investors in Auckland.
"John Key keeps calling on the Reserve Bank to get on with it. Meanwhile, he's in denial. They [the Reserve Bank] can only do so much...what is lacking here is a Government prepared to step up in terms of controlling demand."
Today's announcement comes after Prime Minister John Key expressed frustration about the Reserve Bank's response to rising house prices, saying that it should not need any more time to investigate stricter rules for property investors and should "just get on with it".
National says its housing plan is comprehensive and includes the creation of special housing areas, a $1 billion housing infrastructure fund to help councils meet demand, and the likely establishment of urban development authorities to speed housing development in certain areas.
New Zealand First leader Winston Peters said recent measures from the Reserve Bank had minimal influence, and the latest proposals would be no different.
"There is a touching naivety, and a serious lack of being street wise, in the Reserve Bank's approach. It ignores the two great drivers - high immigration and offshore buying.
"Given the way house financing is constructed from offshore, foreign investors will carry on as usual whilst New Zealand investors will simply have to stump up a greater deposit.
"Accordingly, for a short time longer the house price bubble will just get greater before the inevitable crash."