If the dog is inside the house, you can't hear his barks from outside of our property, by the way. Neighbour only heard him because he was right next to the house.

Easier solution: don't be an asshole neighbour.

Not sure why you want to regulate what I do with my house and dog, which isn't harming or annoying anyone, while completely missing the point -- the neighbour shouldn't be there.

And he certainly shouldn't have called the police for something that he caused.