The Government is considering clamping down further on foreign investors who load up local subsidiaries to minimise the amount of tax they pay.
Officials says the changes would reduce investment returns in some cases, but is unlikely to have a big effect on the amount of foreign money coming into New Zealand.
At present, the amount of debt that can be used to buy local assets is restricted only for single foreign investors, 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 reduce the tax they pay on their local investments.
Mr Dunne says the proposed changes would also exclude some debt held overseas by investors from being used to justify excessive amounts of borrowing against assets in New Zealand.
Officials says the changes would reduce returns to foreign investors in a limited number of cases, but is unlikely to have a big effect on the amount of foreign investment coming into the country.
