Part of the problem has been defining exactly who qualifies as a foreign buyer, and figuring out what it all means in the bigger picture.
Countries around the world have tried to make home ownership more affordable with an assortment of different approaches. Some seem to work, others ... not so much.
The following is hardly an exhaustive list, but it provides a glimpse into the options NZ might consider down the road:
Foreign real estate ownership is a hot-button political issue Down Under and the Australian government has gone to great lengths to curb it.
Generally, buyers from outside the country are limited to newly constructed houses and apartments, and the Foreign Investment Review Board — which yields broad power over money flowing into Australia — acts as gatekeeper. It costs $5,000 just for the right to make an offer on a place costing up to $1 million, and $10,000 for each subsequent million-dollar leap in purchase price.
Foreigners who buy vacant residential land have to build on it within two years.
Australia has stepped up enforcement with a crackdown that began in earnest last year. Foreign investors shown to have broken the rules can face up to three years in jail or a fine of $127,500. Individual real estate agents who help a foreign buyer circumvent the system can be fined up to $42,500, while companies could be hit with a $212,500 fine.
As of January, the government says it forced the sale of 27 homes bought illegally, including a $39-million Sydney mansion previously owned by a Chinese real estate firm. More than 1,300 property sales have been investigated, according to Reuters.
Australia also forces foreign investors to register purchases with the federal government, part of an effort to gather and analyze an extensive data set on the issue.
The United Kingdom
Lawmakers in the U.K. responded to public anger over ballooning home prices, particularly in London, with a considerable capital gains tax.
The move was intended to level the playing field between overseas real estate owners and residents of the U.K., who usually pay a capital gains tax of 18 or 28 per cent, depending on their income, on the sale of a residential property that is not their primary home.
As of April 6, 2015, the taxman takes up to 28 per cent at the point of sale on foreign-owned residential property.
The capital gains tax for overseas owners was introduced shortly after the government took steps to cool sales of luxury homes by boosting the stamp duty — a progressive tax paid on most residential properties in the U.K. — for homes valued at more than 1 million pounds, or about $1.9 million.
The municipalities surrounding London also have the option to levy their own taxes on home sales.