Incoming prime minister Christopher Luxon said National is ditching its foreign buyers tax proposal as part of its coalition agreement with NZ First.
Earlier this year the party announced its tax plan, claiming it would cost $14.6 billion over four years and be funded by four tax changes, along with other "reprioritisations" and "savings".
The tax changes included a 15% foreign buyer tax on houses worth over $2 million, to raise $740 million on average per year.
The figures came under attack by economists, who said it didn't add up. It was also opposed by New Zealand First.
Today, Luxon said that element of its tax plan was gone.
“Overwhelmingly, New Zealanders' primary concern is the high cost of living and a change of government alone doesn’t make life easier.
“However the things that we do will make the difference. One of those is tax relief, because the coalition parties believe that people should be rewarded for their efforts, hardworking Kiwis should keep more of what they earn and our government will deliver on that promise.
“The government will treat taxpayers money with respect and we will be disciplined in our spending.”
The coalition agreement between National and NZ First says: "Tax relief will be progressed as set out in National’s Tax Plan, but will not include a repeal of the foreign buyer’s residential property ban."
Tax relief
Asked how he plans to pay for tax cuts without the foreign buyers tax, Luxon said: “I want to be really clear, we are going to deliver tax relief as we promised and in the amounts we promised to working and lower to middle income earners in New Zealand.
“We have, through our process, discovered that we have a buffer in our tax plan going into this and we also have additional savings and additional revenue raising mechanisms as well.”
The parties have not guaranteed further tax cuts beyond 2024, and there is no ongoing commitment to income tax changes, including threshold adjustments, beyond those to be delivered next year.
Luxon also said National has adopted ACT's policy to speed up the rate in which interest deductibility for rental properties is restored.
He also said the government will also progress the regional infrastructure fund proposed by NZF, with $1.2 billion in capital funding for regional infrastructure.
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