Release: National’s overseas house buyer revenue has collapsed

Chinese citizens would not have to pay National’s planned 15 per cent tax on foreigners who buy homes in New Zealand, rendering its income projections to pay for its tax cuts meaningless, Labour’s Overseas Investment spokesperson David Parker says.

“The central source that National has booked to pay for half their tax cuts has officially collapsed,” David Parker said.

Publicly available Inland Revenue advice provided to a Parliamentary Select Committee clearly states that ‘the non-discrimination Article in the new Double Taxation Agreement [between NZ and China] applies to taxes of every kind and description’. Current National MPs Paul Goldsmith, Andrew Bayly, Judith Collins and Ian McKelvie were on the Finance and Expenditure Committee when it considered that agreement in 2019.

“This means Chinese nationals must be excluded from National’s proposed tax, in addition to the exclusions for Australia and Singapore that they have already admitted.

“Chinese buyers were 36.7 per cent of non-New Zealand house transfers in the year before Overseas speculators were banned. When you add Australia (19 per cent) and Singapore (3.5 per cent), this means at least 60 per cent of non-New Zealand house transfers would be excluded from National’s tax.

“We know that South Korea (under our Free Trade Agreement) and Mexico and Japan (under Double Taxation Agreements) would also be excluded from this tax, pushing that 60 per cent figure even higher. National is running out of countries that it can tax.

“Additionally, Canada has now banned foreign buyers, as we did in 2018. The example that National used yesterday was wrong – Vancouver doesn’t now apply a stamp duty because house sales to foreign buyers have been banned there too.

“National need to come clean with New Zealanders. They know these tax cuts for landlords are unaffordable, and that deep cuts to Health and Education are inevitable. This fig-leaf they’ve concocted to hide this has now fallen away.”

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