Isaac Davison is a NZ Herald political reporter.

Government takes another look at stamp duty - still not buying into it

Bill English said there was little evidence that stamp duty had an impact on house prices. Photo / Michael Craig
Bill English said there was little evidence that stamp duty had an impact on house prices. Photo / Michael Craig

The Government says a stamp duty on housing is not on its agenda after newly-released documents showed that officials were investigating the policy earlier this year.

A briefing paper from January, released under the Official Information Act, showed that Inland Revenue Department officials had provided advice for the ministers of finance and revenue on stamp duty.

The IRD said it had "worked through some issues which would need to be addressed if New Zealand were to ever consider bringing in a stamp duty".

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Revealed: The truth about foreign buyers

A stamp duty is a set surcharge paid at the time of a transaction, and is used by some countries to deter foreign investment in housing.

Finance Minister Bill English told reporters at Parliament this afternoon that the tax measure was not being considered by the Government.

Asked why officials were looking into it, Mr English said: "It's a tool that's been used in other jurisdictions. We've been back two or three times to have a look at whether there's versions of it that could work.

"But the advice is always that it's a pretty inefficient tax."

There was little evidence that stamp duty had an impact on house prices, he said.

The Government has previously said that stamp duty would also breach New Zealand's free trade agreement with Korea.

The absence of stamp duty or a land tax in New Zealand is promoted by real estate companies who specialise in sales to offshore buyers.

In the United Kingdom, stamp duty is charged on all house purchases worth more than $270,000. In Hong Kong and Singapore, a stamp duty of 15 per cent is applied to foreigners.

The New Zealand Government has said a land tax would be its preferred option if non-residents were shown to be shutting New Zealanders out of the housing market.

However, Mr English said a land tax was also not part of the Government's work programme at this time.

Data released earlier this month showed that just 3 per cent of New Zealand homes were bought by non-residents over a three-month period.

However, officials warned that the data was incomplete and the real figure could be higher.

http://www.nzherald.co.nz/business/news/article.cfm?c-id=3&objectid=11636711

NZH

- NZ Herald

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