LINZ chief executive Peter Mersi says the data will help Inland Revenue ensure people meet their tax obligations.

Fears that New Zealand is being sold off to foreigners are a myth, according to new research.

Data collected by Land Information New Zealand (LINZ) shows just three per cent of homes were sold to overseas residents in the first three months of 2016.

LINZ chief executive Peter Mersi said the information would help Inland Revenue ensure people met their tax obligations.

Economist Shamubeel Eaqub said fears about foreign property buyers "with suitcases of cash" were misplaced in February.

"However this is not a register of foreign ownership," Mersi said, noting residency was not the same as nationality.

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The data showed that, of the rest, 50 per cent of transfers involved buyers that only had New Zealand tax residency.

Thirty-seven per cent involved buyers who did not need to provide tax information – the majority were NZ citizens or residents.

Ten per cent involved buyers who did not need to provide tax information because the sale or purchase was signed before the law came into force. That exemption ended at the end of March

LINZ had been conservative in capturing the data, by including it if only one of a number of joint purchasers were overseas buyers.

The breakdown showed that of the 1158 property transactions included in the 3 per cent, China accounted for 321, Australia 312 and "mixed, including NZ" 162. The largest other groups were UK (99) and USA (51).

Of the 12,000 transfers in Auckland 4 per cent involved an overseas resident. They totalled 474 transfers with China again topping the list at 276 followed by Australia 45.

It was the first time data was released, and it had only been collected since October though the data before the start of the year was not robust.

There was a higher degree of confidence in the numbers in the first quarter of 2016.

Trust companies and businesses had been removed for a clearer picture. But some on student visas and work visas may not be included, because of apparent confusions over one of the questions in the tax form, leaving doubt over the overall accuracy of the figures.

​Mersi said LINZ could not say how many of the transfers were homes.

Land Information Minister Louise Upston said information was in part gathered to inform future housing policy.

But future corrections would be made to the form to get a better picture.

"But this is not a register of foreign buyers of houses in Auckland. This is not that kind of report."

The data started to build a picture of tax residencies and the countries they came from.

Of the numbers 321 were from China and might be a house, a building or a farm, she said.

"Those are the facts as they are presented", and it was important to use data rather than make accusations based on someone's surname – a reference to Labour's controversial analysis of buyers' surnames in Auckland.

As data was collected a better picture would emerge.

Labour's housing spokesman Phil Twyford said the data did not give an accurate picture because it was collected when offshore speculators had temporarily deserted the market.

"For most of the six months this information was collected, the Auckland housing market was in a temporary lull. Most analysts attributed this to the new requirement for foreign buyers to register with the Inland Revenue and the Chinese Government's crackdown on illegal financial transfers out of China."

It also excluded trusts and businesses and a further 45 per cent of the Auckland sales were also excluded because of exemptions for those buying family homes and those who signed contracts before the law came in.

"As a contribution to the housing debate, this data is effectively useless."

He called for a searchable register of foreign property ownership, as was the policy in Australia and the United Kingdom.

"The Government is out of touch with the 70 per cent of New Zealanders that support Labour's policy to ban offshore speculators from buying existing homes."

IRD's Group Manager of Investigations and Advice Patrick Goggin said the data would support compliance and monitoring activity,

Prime Minister John Key last month said a land tax could be slapped on foreign buyers, including Kiwis overseas, if the data shows overseas speculators are fuelling the residential property boom, Prime Minister John Key has hinted.

Key said the Government was yet to make a call on a land tax if foreign property speculation became "a runaway train".

It would be applied to all non-resident buyers, and wouldn't target just one nationality, Key said.

But tax specialists are wary of endorsing the option.

Tax lawyer and convenor of the tax law committee Neil Russ has said there are ways for foreign buyers to get around a land tax.

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