UPDATED 5.14pm: The Prime Minister is stressing that speculators who sell a house after two years will still be taxed, it's just not as clear cut.

A "bright line test" is being introduced in October, for anyone selling an investment property within two years of buying it.

John Key says they originally wanted a three year limit, but went with the IRD's recommendation of two.

He says investors are still taxed outside that time limit.

"Doesn't matter if it's two years and one day or 22 years and one day - you still pay tax.

"But in between that zero to two years and one day period, there's no ambiguity. If you're in that period, you pay."

However, New Zealand First is accusing the Government of ignoring the big problems facing the housing market.

Leader Winston Peters says tax conditions are not what's driving prices up.

"Sitting on a land bank, for example, has not been stopped; buying rental property in New Zealand to rent to New Zealanders is not going to be stopped.

"It's all about property speculation."

Peters says the time frame is too short.

"To think that this property speculation is a month or a six monthly experience is just plain naive, so it's not going to work."