The tax would capture New Zealanders living overseas, though expats could possibly get an exemption for three years.
A tax working group recommended a land tax in 2009, but it was not adopted at the time. The working group wanted the tax to apply to all property owners, not just offshore buyers. It estimated that a 1 per cent tax on the value of land would lead to an immediate fall in land value of 17 per cent, making housing more affordable.
The impact of a narrower land tax, applied only to offshore buyers, has not yet been calculated.
Proponents of a land tax say it is a simple, fair policy, which would encourage more intensive development and stop land banking - the practice of sitting on land while it accrues value.
A universally-applied tax would be a hugely controversial policy. Herald analysis has previously shown that a tax of 0.5 per cent could cost Auckland homeowners more than $1100 a year on average. It would disproportionately affect the elderly, farmers, and iwi, unless exemptions were created.
Capital gains tax
A capital gains tax (CGT) requires a person to pay a tax on the gains of assets, such as property or shares. If a house is bought for $500,000 and sold for $600,000, the tax is paid on the gain. Proponents say that a capital gains tax is about fairness, because capital gains should be taxed as salaries and wages are. It would also deter property investment.
The OECD has repeatedly urged successive governments in New Zealand to adopt a comprehensive capital gains tax, which would mean even the gain in value of a family home would be taxed every year.
The Labour Party's policy, which it ditched in 2014, was a narrower capital gains tax, which exempted the family home and several other assets.
Tax experts said the measure was complicated. People could rearrange their tax affairs to avoid it, and there were numerous loopholes and complexities.
The National-led Government opposes the idea, saying it has not worked overseas.
New Zealand Property Investors Federation head Andrew King said a capital gains tax would have a knock-on effect to first-home buyers.
Landlords would face higher costs, and pass those on to renters who could be saving for a deposit, he said.
The Government introduced a "bright-line test" in October, which taxes any gains made on houses bought and sold within two years. It differs from a capital gains tax because it is limited to residential property and has a two-year cut-off.
Stamp duty
New Zealand has no stamp duty - an anomaly which is highlighted by real estate companies who specialise in sales to offshore buyers.
A stamp duty is a set surcharge paid on a transaction. It is charged only to non-residents in some countries, and applied universally in others.
However, a stamp duty would breach New Zealand's free trade agreement with Korea, meaning it is highly unlikely to be used in New Zealand.
"The question is, would it be worth it?" Mr Key said last week.
Limit negative gearing
Landlords who make a loss on their rental properties are able to get a tax break, under a practice known as negative gearing. This occurs when a rental property costs more than it earns. If the cost of mortgage interest, maintenance, water, and rates are $25,000 a year, and the income from rent is $15,000 a year, the owner can get a tax deduction on the $10,000 loss.
Thus, negative gearing can create an incentive to invest in housing.
It is hot issue in Australia, where it has been proposed that investors should only be able to negatively gear new properties.
In February, the International Monetary Fund (IMF) recommended that New Zealand take action on the issue. It said negative gearing encouraged investment that would otherwise be loss-making, and "acts as an amplifier of price movements in the real estate market".
The IMF proposed "ring-fencing" tax losses on housing investments, meaning these losses could only be applied against housing income and not all income.
"Ring-fencing housing losses to within real estate earnings would ... weaken an important price driver," the IMF said.
Mr King said tax deductions on losses were integral to any business.
If landlords were prevented from negative gearing, "it would make it impossible for a lot of people to provide rental property" and push up rents, he claimed.
However, analysis in Australia, where negative gearing was briefly abolished in the 1980s, shows the policy did not have a significant impact on rental rates.
Restrict non-resident buyers
The extent of foreign investment in New Zealand's residential housing market is not known, but estimates range from 1 per cent to 10 per cent of total sales.
The Government began collecting data on purchases by non-resident buyers in October and is expected to reveal some of the results soon.
The Labour Party wants the Government to introduce a total ban on non-resident buyers - unless they move to New Zealand or build new homes. Australia has a similar policy, and some say it has failed to cool the country's overheated housing market.
Labour's housing spokesman Phil Twyford disagrees. He says the policy has helped channel $30 billion into new builds in Australia, massively increasing housing supply.
The National-led Government has repeatedly ruled out a ban on foreign buyers.
A total ban would breach the Trans-Pacific Partnership, which does not allow member countries to block foreign investment in most types of property.
Nearly two-thirds of MPs own more than one home
Nearly two-thirds of our 121 MPs own more than one residential property, and a handful own five or more.
Does that mean their self-interest comes ahead of acting on housing affordability? Or are MPs just living out the Kiwi dream by getting an investment property on the side?
The latest pecuniary interests register, published two weeks ago, shows 121 MPs declared interests in a total of 245 residential properties, including their family homes.
That means they own, partly own, jointly own, or benefit from a home, apartment or other residential property. MPs also declared interests in at least 71 farms, vacant sections, and commercial buildings.
National MPs were the biggest property owners, with an average of three residential properties each. Labour MPs declared an average of 1.7 residential properties each.
Social Housing Minister Paula Bennett declared four houses. She agreed that it was not a good look for a minister in charge of state houses to own several properties.
But she was in the "privileged position" of being able to financially support her parents and her daughter, whose houses she had interests in. "I'd rather not [own four properties], but ... for me it is about family and I am in a position where I can support them so I've got an interest in both their properties."
Green MP Kevin Hague, who declared interests in six properties including three rentals, said none was bought for investment.
Two of the rentals were part of his retirement plan and one, on Waiheke Island, had been sold.
Mr Hague said that in some cases property ownership appeared to affect MPs' attitude to policies such as a capital gains tax or a warrant of fitness for rental properties.
"However in my case I hope my actions speak for themselves - I used to have the housing portfolio and have always been a vigorous advocate and supporter of measures to attack property speculation."
Labour leader Andrew Little, who declared one property, a family home in Wellington's Island Bay, said he did not believe MPs were guided by their own property ownership.
Labour's policies were developed not only by MPs but by the party's "rank and file", he said, who had clearly indicated they wanted New Zealand's housing market to be fairer and more affordable.
Prime Minister John Key owned four properties: a house, two holiday homes and an electoral office.
Only 12 MPs did not own or have any interests in property.
