Overseas Investment Amendment Act 2018 (‘Act’)
Overseas investors play a significant role in our economy, but the influx of overseas investors purchasing residential housing in New Zealand has put the pressure on New Zealanders looking to rent or buy their first home.
The Act aims to restrict ownership of ‘sensitive land’ by overseas owners and investors without completely stunting the flow of overseas investments to New Zealand. The Act requires overseas investors and persons to meet certain criteria and to make an application to the Overseas Investment Office (‘OIA’) for consent.
There has been a significant overhaul of the Overseas Investment Act 2005, with the Overseas Investment Amendment Bill 2017 (‘Bill’) receiving royal asset on the 22nd of August 2018. The main change is that Residential Land is now captured in the sensitive land category. Residential land is any land designated residential or lifestyle (by the Council) for rating purposes.
Who can buy Residential Land
You must pass the test of being ordinarily resident in New Zealand to purchase residential land (without consent).
You do not have to obtain consent from the OIO if you:
If you are an overseas investor and do not meet this test, then you will need to apply for consent. The OIO may grant consent to overseas investors to buy residential land if:
The Act also brings forestry rights and other profits-a-prendre (which enable a person to take something from land owned by another) within the definition of sensitive land.
If you are an overseas investor looking to purchase land in New Zealand please contact us to discuss your options well in advance of entering into an Agreement for Sale and Purchase.