The Government is considering further clamping down on foreign investors who load up local investments with debt to minimise the amount of tax they pay.
At present the amount of debt that can be used to buy local assets is restricted only for single foreign investors and not for consortiums of buyers.
Revenue Minister Peter Dunne says the Government wants to close that loophole which has allowed private equity consortiums in particular to use high interest costs to minimise the tax they pay on their local investments.
He says the proposed changes would also prevent some debt held overseas by investors being used to justify excessive amounts of borrowing against assets in New Zealand.
Officials say the changes would reduce investment returns in a limited number of cases but is unlikely to have a big effect on the amount of foreign investment coming into the country.