Prime Minister John Key said yesterday nearly one in five Auckland homes - 17 to 18 per cent - are sold within two years of being bought. Photo / Doug Sherring
Prime Minister John Key said yesterday nearly one in five Auckland homes - 17 to 18 per cent - are sold within two years of being bought. Photo / Doug Sherring
Data on Auckland sales within two years of buying but broker says they’re likely ‘do-ups’
Most Auckland properties sold within two years of purchase are "do-ups" being renovated by young couples working their way up the property ladder rather than investors, a mortgage broker says.
Prime Minister John Key said yesterday nearly one in five Auckland homes - 17 to 18 per cent - aresold within two years of being bought, data provided by officials shows.
But it is not known how many of those are investment properties that would be subject to a new "bright-line" tax on capital gain.
On Sunday Mr Key unveiled the new tax which aims to crack down on speculators who are turning a quick buck on the back of rising house prices. It will apply from October 1 to any property sold within two years of purchase that is not the owner's primary home. The tax will apply to domestic and foreign sellers, irrespective of whether they intended to buy the property to make a profit.
The Government has also announced measures to track non-resident foreigners buying New Zealand properties.
While most commentators have welcomed moves to target property speculators and foreign buyers, some have questioned whether the measures will have any impact in slowing Auckland housing prices which have surged by 18 per cent in the past year.
Mortgage Link broker Stuart Wills said he would be surprised if the percentage of homes bought and sold within two years was as high as 18 per cent. In Auckland most of those cases would involve homeowners, "especially young ones who will buy a house and do it up. It's going to be a stepping stone."
Other investor buyers were purchasing do-up properties in cheaper areas like South Auckland to renovate and re-sell. But most were paying tax on the capital gain and tended to hold on to the properties for longer for rental income.
During question time at Parliament yesterday, Mr Key was asked by Labour leader Andrew Little how many speculators who are not caught by the present capital gains tax would be captured under the new policy.
Mr Key responded that analysis by the Ministry of Business, Innovation and Employment suggested 17 to 18 per cent of Auckland housing transactions involved properties bought and sold within two years.
He added that the new tax would catch investors who bought and sold an investment property within two years.
