New Zealand’s political stage is ablaze with controversy as the opposition National party unveils a bold, albeit controversial, plan to impose taxes on foreign property buyers. The plan, aimed at generating NZ$3 billion ($A2.7 billion) in revenue over four years, is raising eyebrows and sparking heated debates.
Opposition Leader Chris Luxon took center stage in Auckland to kickstart his party’s election campaign on a sunny Sunday afternoon, with the looming October 14 election casting a long shadow. However, Luxon and finance spokeswoman Nicola Willis stumbled over a critical element of their tax policy.
Their proposal involves lifting the ban on foreigners purchasing homes in New Zealand, a move that runs afoul of international tax treaties and free trade agreements. The ban currently exempts Australians and applies only to properties valued at over NZ$2 million ($A1.8 million). Foreign buyers falling into this category would also face a hefty 15 percent tax.
While Luxon remains resolute in his belief that the plan is viable, economists and experts from various corners are skeptical, citing New Zealand’s obligations to treat citizens of several countries equally under international agreements.
“I am rock solid and confident in our assumptions around our plan,” Luxon declared. “We think there’s a way through all of that. We think we can implement it… we’ve had independent legal advice, we’ve validated it.”
Finance Minister Grant Robertson, however, couldn’t resist a jab, suggesting that National might need a new calculator. He argued, “Experts and commentators across the board have pointed out that National’s housing tax simply will not work.”
The issue has become a favorite target for Labour, with Prime Minister Chris Hipkins taking a swing during his campaign launch. Hipkins opined that National seemed to be banking on people not noticing that their homes and infrastructure could be up for grabs by overseas investors.
In response, Luxon emphasized the importance of attracting foreign capital to New Zealand. “It’s important that we can attract foreign direct investment to New Zealand,” he argued. “We are the most restrictive country in the (developed) world on foreign direct investment. Actually being able to open up the ability for foreigners to buy houses… that’s all good common sense.”
As New Zealand’s political battleground heats up, the fate of this controversial tax policy hangs in the balance, making it a topic worth watching as the election draws nearer.
