1 Oct 2015

New Auckland housing rules come into effect

10:59 am on 1 October 2015

New rules aimed at taking some of the heat out of the Auckland housing market come into force today.

House for sale in Upper Hutt.

Photo: RNZ / Alexander Robertson

The first step is the Government's moves to track overseas buyers and tighten the tax rules on property investment to target speculators.

From now, all overseas buyers of property in New Zealand must have a local bank account and an Inland Revenue tax number, as well as giving a tax number in their home country.

And the gains from selling a residential property within two years of purchase will now be taxed, unless the property is the seller's main home, has been inherited from a deceased estate or transferred as part of a relationship property settlement.

Latest figures from the Reserve Bank show that in August, about a third of mortgages went to property investors.

Meanwhile, from November 1, the Reserve Bank's tweaking of the limits on bank lending to low deposit borrowers comes into force.

From that date, property investors borrowing against an Auckland property will need to have a deposit of at least 30 percent.

Banks will still be limited to no more than 10 percent of their lending to owner occupiers who have less than a 20 percent deposit on a house, while elsewhere around the country, that restriction is being eased and banks can have 15 percent of their lending for low deposit borrowers.

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