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:
- Hold a permanent resident visa; and
- Have been living in New Zealand for at least 12 months before the purchase; and
- Have been present in New Zealand for at least 183 days of that time; and
- Are a New Zealand Tax Resident.
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:
- They can demonstrate a commitment to live in New Zealand;
- They buy the land, complete residential development then on-sell the land;
- They buy the land and use it for business purposes or to develop residential housing attached to a core business such as workers accommodation; or
- If they demonstrate that the development of residential land will be a benefit to New Zealand (provided that the land is sold once the development has been undertaken).
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.
