But the accompanying news that non-residents buying property would first have to open a bank account here – get an IRD number and declare their own passport and home tax details may have a bigger impact.
The Government is pointing to this measure as having the most potential to reduce foreign demand for Auckland properties and Prime Minister John Key has indicated information on non-resident buying would be gathered and published.
He said New Zealand tax authorities would also share these details with foreign tax authorities.
The elephant in the room of Auckland’s property debate is whether some of the money pouring into Auckland – from China in particular – is money laundering of ill-gotten funds.
Without any data the debate is fuelled by anecdote and rumour – but the issue is capturing global attention.
In November China’s President Xi Jinping asked for Key’s help to track down a number of Chinese nationals who had fled to New Zealand with allegedly corruptly obtained funds. This was part of Xi’s campaign to crack down on the ‘tigers and flies’ officials and their cronies. Chinese authorities say New Zealand is the third most popular destination for such fugitives.
The issue of money laundering from China is heating up in Australia too – where data on how much property is bought by non-residents is collected.
More than 25 per cent of all new and existing homes sold last year in Sydney and Melbourne were sold to non-residents – leaving many across the Tasman asking where the money came from.
The investments have sparked calls for tougher laws governing money laundering.