A property data analyst has warned that thousands of house sales could be caught by the New Zealand government’s new tax on gains made from selling investment properties within two years.
CoreLogic said the highest proportion of those were in the property hotspot of Auckland, where 15% of homes sold in 2014 had been owned for under two years. The company’s figures show the rate of homes resold in Auckland within two years was double that for the rest of the country and that up to 40% of Auckland property transactions were investment led.
The new tax measure takes effect in October, with the aim of helping cool the rapid rise of Auckland house prices, which have surged largely as a result of domestic and international investment demand. Senior CoreLogic analyst, Nick Goodall, believes the tax could bring in up to NZ$70 million a year.
He goes on to says that the data on the market in Auckland was a clear sign of speculation by buyers: “You know, at the moment they have fairly good confidence they’ll get that capital gain, and over a short period rather than a longer term – which is generally what the feeling would be when you buy a property.”