Minister Nick Smith keen to 'up the ante' on housing supply

April 26, 2016: Prime Minister John Key with Minister of Housing Nick Smith at the launching of the new affordable housing development at Hobsonville Point. Photo / Brett Phibbs

The Government is set to confirm plans next month to force councils to unlock more land for housing.

Housing Minister Nick Smith told TVNZ's Q+A this morning that he would be "upping the ante" on increasing housing supply, in particular in Auckland.

"Next month I will be producing a national policy directive under the [Resource Management Act] that will put far tougher requirements on growing councils to ensure they are freeing up long-term the land that is required so that we don't get into the sort of juggernaut that has been at the core of the unaffordable housing problems in Auckland."

The Government was "pulling every lever it had" to increase supply, he said, and progress had been made on plans to build houses on surplus Crown land in Auckland.

Several contracts with developers would be announced in the next few weeks, and he expected the first house to be built on this land before the end of the year.

Around $52 million in funding for the scheme had been exhausted, and further funding was expected to be confirmed in this month's Budget.

Dr Smith also told Q+A that Auckland's Unitary Plan was "hugely important" for ramping up housing supply in the city.

"If we're going to solve the problem in Auckland, it can't be the sort of binary choice - is it up or is it out? It's actually both."

He would not say whether the Government would intervene if the council failed to approve a plan which allowed more intensified development.

The Reserve Bank said this week that Auckland needs 13,000 houses a year to keep up with demand. It is currently building 9500 houses a year.

Dr Smith said he was "always interested" in ideas for dampening housing demand.

But he ruled out toughening up the Government's "bright line test" to require capital gains to be paid if a house was re-sold within five years, rather than the existing threshold of two years.

He said a new requirement to provide tax details for every house purchase would make it "damn difficult" for investors to avoid tax on any capital gains.

"If you buy property with the intention of making a profit on its resale, you're required to pay the tax and, watch out, IRD has now got your tax number and so they're going to be very easily able to track every property that's bought and sold for investment purposes.

"And in my view, we've also invested that big lock of investment - people who are pretending they can make those investments in housing markets in Auckland without paying tax are going to get a very nasty surprise."