A study ranking New Zealand the lowest for property purchase tax highlights a missed opportunity to make housing more affordable and boost supply, according to an economist. The international comparison of 26 countries conducted by accounting and consultancy network UHY showed New Zealand at the bottom of the table, with purchasers here charged nothing to transfer a US$1 million property unless they are GST registered. "New Zealand has no central or local government transaction taxes on real estate and residential property deals between home-owners, as they are exempt from the Government's goods and services tax when the transaction is between two persons who are both unregistered for GST," UHY said. Independent economist Shamubeel Eaqub was concerned about New Zealand's ranking. "We've got a tax system with a very light touch when it comes to property, whether it's capital gains tax or stamp duty," Eaqub said. "It would be a very good thing for New Zealand to tax property purchases because we can ring-fence that tax income. It wouldn't be just a revenue grab but would be used to make houses more affordable and increase the supply of housing." The table showed Belgium as the most expensive country for a residential property transfer tax on the purchase of a US$1 million property, charged US$113,131, followed by Spain at US$80,000 and Pakistan at US$60,000. At the bottom of the chart heading off New Zealand was Russia were purchasers paid US$30.45. Tim Livingston, a director of UHY Haines Norton (Auckland) which is a member of the UHY network, said many economies risked over-exploiting property purchase taxes as a way to bolster finances, "so it's encouraging to see New Zealand exercising restraint". "Higher property purchase taxes can put a strain on domestic buyers, who may not actually be particularly wealthy, given house price inflation in some locations over the last decade or two," Livingston said. "Levying significant taxes on the cost of a new property can also constrain labour market mobility," he said. "If businesses have to offer much greater incentives for senior executives to relocate, this could have a serious impact on job creation and business investment, and ultimately on the wider economy." Phil Twyford, Labour's housing spokesman, was unsurprised to hear of New Zealand's ranking. "Stamp duty is a relatively inefficient tax and there are better ways to fairly tax property speculation," Twyford said. Labour did not advocate stamp duty but wanted property speculation to be limited by banning non-resident foreign buyers and for a tax on those speculators who sold an investment property excluding the family home within five years of purchase. As well, Labour proposed to axe negative gearing so people could not write off rental property losses against other taxable earnings, Twyford said. Australia featured high on the list, with $1 million purchases there incurring US$48,155.50 tax. International real estate consultants trumpet New Zealand's lack of property tax as a selling point, using that along with our stable political regime and lack of civil unrest as features to draw global investors here.