Monday 21 May 2018
Last year we wrote about the Overseas Investment Amendment Bill which was introduced just before Christmas last year. The bill had passed through its first reading and was referred to the Finance and Expenditure Committee. The due date for reporting back from the Committee has been pushed back from February to May, and now end of June 2018.
The Bill will ensure overseas persons who are not resident in New Zealand will generally not be able to buy existing houses or other pieces of residential land. The Bill is designed to make homes more affordable for New Zealand buyers in the property market. While focusing on residential land, it also makes more general changes to the Act including enhancing information gathering and enforcement powers of the Overseas Investment Office.
Residential Land
The Bill amends the definition of “sensitive land” to include land that is or includes “residential land”.
For residential land purchases, those who are not “ordinarily resident in New Zealand” will have to apply to the Overseas Investment Office for consent.
The definition of “ordinarily resident in New Zealand” will be tightened. New Zealand citizens will be considered as “ordinarily resident in New Zealand”. Other than that, a person with a permanent residence visa and has been residing in New Zealand for at least 183 days in the last 12 months will qualify as not being an “overseas person”. If you only hold a residence class visa or temporary visas, it appears that you must apply for consent if you wish to purchase residential land.
For land purchase which is not residential land, the “ordinarily resident in New Zealand” test remains the same. To qualify, the person must hold a resident class visa and either domiciled in New Zealand or have been residing in New Zealand with the intention of residing in New Zealand indefinitely for at least 183 days for the past 12 months.
In other words, the test is more stringent if you want to buy residential land. Those who have obtained residency in New Zealand but not become a permanent resident will require consent.
However, this is not the end of the story for new residents to New Zealand. The next article we will explore new pathways created under the Overseas Investment Amendment Bill for those residents to seek consent from the Overseas Investments Office. Those pathways are intended to either provide benefit to New Zealand and/or to secure commitment to New Zealand from the new residents.
Articles on this website are for general information only. If you require specific advice, please contact us.
