Property tax won't hurt North: Agent

Whangarei-based Bayleys Real Estate agent, Tony Grindle said the Northland property market was used to being hit for Auckland's "sins". Photo / Getty Images

A proposed new capital gains tax is expected to have little effect on Northlanders.

The proposed tax on investment properties sold within two years arose from the 2015 Budget and is one of several measures designed to quell the Auckland property market.

It will come into effect from October 1 and the rate will be the same as the seller's income tax rate.

Other measures will require all non-resident buyers and sellers to provide a tax identification number from their home country along with identification, such as a passport.

They must also have an Inland Revenue Department number and New Zealand bank account.

The tax was slammed earlier this week by tax experts as unfair, incoherent and likely to affect people it was never intended to capture.

Whangarei-based Bayleys Real Estate agent, Tony Grindle said the Northland property market was used to being hit for Auckland's "sins".

"The unsuccessful low to value ratio's (LVR) used to slow Auckland's market didn't work for them but it certainly hit the rest of the country."

But Mr Grindle said the latest tax proposal was not likely to hit the region as hard as the LVR as he was not aware of many investors entering the market with the intention to sell within two years.

"At the moment, there's quite frankly just not as much money to be made in that amount of time in Northland as there is in Auckland."

The proposed tax is likely to raise $5 million a year.

Stephen Tomlinson, of the New Zealand Law Society, was among submitters who said the taxation bill should not be passed as it was likely to be ineffective in achieving its stated objective which was to target speculators who were not meeting their tax obligations.

"It will simply change their behaviour so land will not be disposed of within the two-year period," Mr Tomlinson said.

He also questioned why, if the move was aimed at Auckland, the rest of the country had to bear the brunt.