Treasury research released by Housing Minister Nick Smith today shows that of almost 200,000 people claiming losses on rental properties, 11 per cent are non-residents.
The research, touted by Housing Minister Nick Smith as proving a ban on foreign buyers is unnecessary, also says that while available data "suggests" the level of foreign ownership is low, it bemoans the amount of information available.
The Government has refused to collect data on foreign buyers as it struggles to get rising house prices under control, saying the impact on house prices is negligible and the data too difficult to collect.
The research was based on analysis of taxes paid by non-residents - including overseas-based Kiwis - on rental properties.
It was carried out last June and suggests the level of foreign home ownership has been static since a Reserve Bank survey put it at less than 5 per cent in 2007.
A Treasury briefing to Minister of Finance Bill English based on the report says "the available data suggests that the level of foreign ownership of New Zealand housing remains relatively low, but the limitations of the data mean that it is difficult to assess the extent to which foreign ownership rates are changing over time".
It said that in 2011, just over 199,000 taxpayers had reported rental income of losses through personal tax returns.
Of those, 11 per cent, or about 22,000 people, were non-residents while about 2000 were of unknown residency.
Smith said earlier today the research showed a ban was unnecessary.
"What it reinforces is that the levels of overseas ownership of homes in New Zealand is small, that it's having no substantive impact on the market, and that making changes in those areas are not going to make a material difference for Kiwi families," he said.
The level of foreign ownership was lower than in Australia which had restrictions on foreign buyers, though those restrictions were under review over concerns they were not working.
The "consistent advice" from officials was that the the level of overseas ownership of homes in New Zealand was small and was having no major effect on the market, Smith said.
"It's not an area that's going to make housing more affordable for Kiwis and that's why I'm focussed on the issues that will make a difference in making housing more affordable," he said.
Labour leader David Cunliffe said his party believed a policy restricting foreign owners was necessary.
He said REINZ and bank statistics showed 10 per cent to 15 per cent of sales in Auckland in the past year were "related to non-resident foreign investors".
"We think that's having a significant impact on the market, adding to the housing bubble and we don't think that's either in the interests of the New Zealand economy as a whole, or in terms of particularly first-home buyers who are struggling to get their foot in the door."