Prime Minister John Key says the Government reserves the right to apply a land tax in order to restrict overseas buyers of residential property in New Zealand.

But the Government was waiting for better data on whether there was actually a problem.

His own "gut instinct" was that Chinese buyers in the Auckland market were New Zealand-based.

Mr Key made his comments on TVNZ's Q + A during an interview conducted in China when he was there last week.

Any such tax would not apply to investors from a specific county.

"If we were going to apply that sort of thing, we would apply it to offshore investors."

Labour's housing spokesman Phil Twyford said that after years of denying there was a problem, "the Prime Minister might have woken up to the damage that offshore speculators are doing".

But there was no action to back up these "musings".

Mr Twyford said the "random" statement from Mr Key raised a lot of questions.

"Has he done the work on what the impact of a land tax would be and how it would apply?

"Is this just a revenue grab or would it actually have an impact on the number of offshore buyers?

"How does this fit with National's promise not to implement new taxes?"

Last year's Budget imposed new rules on non-resident foreign buyers of residential property, including the requirement to have an IRD number and New Zealand bank account -- which took effect from October.