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18 May 2015
NZ Govt introduces capital gains tax
FXStreet (Mumbai) - New Zealand Prime Minister John Key announced a new policy on Sunday aimed at stemming investor activity in the booming housing market, adding to similar measures introduced last week by the RBNZ.
Key's National led government will put a capital gains tax on properties sold within two years of buying, the prime minister said on Sunday, with the new rules set to come into place in October, the same time the Reserve Bank's harsher loan-to-value ratio (LVR) restrictions will come into effect.
The new rules come amid evidence of rapid house-price inflation in New Zealand's most populated city, Auckland, where record immigration levels and low interest rates have ramped up demand for housing.
On Thursday the RBNZ announced new criteria for its LVR restrictions, which would require property investors in Auckland to put up at least a 30% deposit on a new mortgage.
Policymakers are concerned that a correction in the housing market could have widespread ramifications for the economy.
Key's National led government will put a capital gains tax on properties sold within two years of buying, the prime minister said on Sunday, with the new rules set to come into place in October, the same time the Reserve Bank's harsher loan-to-value ratio (LVR) restrictions will come into effect.
The new rules come amid evidence of rapid house-price inflation in New Zealand's most populated city, Auckland, where record immigration levels and low interest rates have ramped up demand for housing.
On Thursday the RBNZ announced new criteria for its LVR restrictions, which would require property investors in Auckland to put up at least a 30% deposit on a new mortgage.
Policymakers are concerned that a correction in the housing market could have widespread ramifications for the economy.