19 May 2015

Property rules will help track illegal money

12:28 pm on 19 May 2015

Tougher rules for foreign property investors will make it easier for governments to track any money that has been obtained illegally.

Under changes announced on Sunday by the Government, foreign buyers will need an Inland Revenue number and a New Zealand bank account, when previously they did not.

Russel Norman

Russel Norman Photo: RNZ / Kim Baker Wilson

The Green Party believes it might make some investors, particularly from China, think twice before buying houses in Auckland.

Co-leader Russel Norman said it should have some effect on property investment.

"How much of the money coming out of particularly mainland China is informal, or people would be concerned if the Chinese government was taking a close look at it?

"If the New Zealand government flags it with the Chinese government and says 'hey this money's coming into New Zealand, they're buying property in New Zealand' - how many of those buyers would be concerned by that?"

Prime Minister John Key said the change should make it easier for the Chinese Government to track its citizens which it believed had acted corruptly.

"Part of what we're going to be doing when someone registered for a New Zealand IRD number is share that information with other countries and also when they apply for a bank account in New Zealand that will give us quite a lot of information."

Mr Key said that aspect of the change was more about dealing with money laundering than with trying to rein in the housing market.

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