The Prime Minister believes New Zealanders would understand if the Government went back on its word of no new taxes at the last election.

John Key is waiting to get data from Inland Revenue on who's been buying houses here before he considers a land tax for foreign buyers and for Kiwis living abroad who own houses here.

Mr Key believes Kiwis understand that a Government has to adapt to circumstances as they arise.

"I don't think I'm terribly concerned at the moment we're going to be breaking that promise at this point.

"I mean let's see, you know, we always have to deal with the situation as things change - if something becomes more pronounced, then the Government has to go and deal with it."

Meanwhile, Labour is calling for the Government to drop the complicated plans for a land tax. The party's housing spokesperson Phil Twyford said it would be better to ban foreign speculators, unless they are building a new property.

He said the Prime Minister is only considering a tax because he backed himself into the corner by ignoring the issue.

"Now he finds himself trying to cobble together a much more complicated land tax that could end up targeting Kiwis who happen to be living overseas."

Mr Twyford said a land tax won't fix the housing crisis. He said overseas examples show a land tax is usually set at around one percent.

"How is that going to be any kind of deterrent to foreign speculators who last year in Auckland made capital gains on average of 25 percent?"