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Will New Zealanders face a new ...

Will New Zealanders face a new tax on property profits?

Following the Australian Budget speech earlier this month, it was revealed that people investing in the nation's property market from overseas will have to pay an extra tax to reside in the country.

The New Zealand Herald reports that New Zealand foreign affairs minister Gerry Brownlee has been looking into whether or not Kiwis will be affected by the tax - something which he is currently in discussion with the Australian government about.

In the Budget, Australian treasurer Scott Morrison announced that the exemption from capital gains tax that foreign and temporary tax residents can currently benefit from is to be removed.

As a result, this will mean that property investors from overseas will have to pay up to 50 per cent of any profits they make from house sales in Australia to the government in tax.

However, it does not appear that Australia wants to target people who move to the country from New Zealand, but rather wealthy investors from the Asia-Pacific region and elsewhere overseas, as the government wants to make sure these property buyers are boosting the economy down under as much as possible.

Mr Brownlee explained: "What it looks like is the Australian Budget wants to capture some of the foreign purchases of land, similar to the way we do in New Zealand.

"But that doesn't mean that New Zealanders are caught, at this point. We are still in discussions about that."

The policy is yet to be written, but Mr Brownlee is working to ensure that New Zealand takes a central role in discussions to guarantee the fairest outcome possible.

A spokeswoman for the Ministry for Foreign Affairs and Trade added: "New Zealanders living in Australia are not considered foreign investors for the purposes of Australia's foreign residential property investment regime."

In addition, Mr Brownlee has recently been assured by Australian foreign affairs minister Julie Bishop that New Zealand will always be directly informed of any policy changes affecting Kiwis living in Australia.

All information provided is of a general nature only and does not take into account your personal financial circumstances or objectives. Before making a decision on the basis of this material, you need to consider, with or without the assistance of a financial adviser, whether the material is appropriate in light of your individual needs and circumstances. This information does not constitute a recommendation to invest in or take out any of the products or services provided by SMATS Services (Australia) Pty Ltd or Australasian Taxation Services Pty Ltd.

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