The government of New Zealand has just introduced tougher rules for foreign property investors which will make it easier to track any money that has been obtained illegally.
Foreign buyers will now need an Inland Revenue number and a New Zealand bank account in order to buy a property. Previously, this was not the case.
Co-leader of the country’s Green Party, Russel Norman, believes it might make some investors be more cautious when buying houses, particularly in the hotspot of Auckland.
“How much of the money coming out of particularly mainland China is informal, or people would be concerned if the Chinese government was taking a close look at it?”, he asks. “If the New Zealand government flags it with the Chinese government and says ‘hey this money’s coming into New Zealand, they’re buying property in New Zealand’ – how many of those buyers would be concerned by that?”
Prime Minister John Key agreed that the new measures would make it easier for governments to track citizens which they believe have acted corruptly, but added that that aspect of the change was more about dealing with money laundering than with trying to control the housing market.