For many foreigners, the Overseas Investment Amendment Act has put a stop to, or at least made the pursuit of their plans for New Zealand, significantly more complicated. Now, the New Zealand government is blaming it for hampering the economy and is proposing major reform in 2025.
Unlocking the door to your dream home in New Zealand may soon be easier…
Introduced in 2018, the Overseas Investment Amendment Act modified legalisation from 2005. Its primary purpose was to restrict most non-resident foreigners from purchasing existing property in New Zealand. It did so by classifying residential land as “sensitive land”. The intention was to make housing more affordable for New Zealanders.
Proposed changes to overseas investment
If the Overseas Investment Amendment Act has brought your New Zealand plans down like a led balloon, hope could be on the horizon.
In a press release, Associate Finance Minister David Seymour committed to a reform of the overseas investment, saying that the “At the core of these principles is reversing the presumption that investing in New Zealand is a privilege and that investors must justify their transaction to the government. The new starting point is that investment can proceed unless there is an identified risk to New Zealand’s interests.”
He goes on to say that the restrictions have held back the economy by preventing investors from even considering New Zealand. Therefore, New Zealand has lost out on wage growth, investment in technology and tools. As of now, the plans are to fast track the application process, start with the principle that purchases can be made, unless risk factors are identified, and be more flexible. The release finishes with, “Attracting more overseas investment is a vital part of the Government’s economic strategy.” The minister will develop proposals before the end of 2025.
The Overseas Investment Amendment Act
As it currently stands, under the act, you are only able to purchase property if:
- You hold citizenship from New Zealand, Australia or Singapore
- Hold a “permanent resident” visa or a “resident class” visa and are ordinarily resident in New Zealand
To be classified as “ordinarily resident” in New Zealand, you must:
- Have been living in New Zealand for at least 183 days in the preceding 12 months
- Are a tax resident in New Zealand
If none of the above applies then overseas buyers must apply for consent to purchase land from the Overseas Investment Office.
In short, the Overseas Investment Act means that only those looking to settle long-term in New Zealand are able to purchase a home there. And even then, you must put in the time before you are able to buy.
Exceptions
However, if your spouse is a New Zealand citizen, then you can buy together without needing consent.
For those that hold another visa, like a student or work one, it is possible to purchase a property, provided criteria is met. The application process takes ten days, and the starting price is €2,040. To be eligible, you have to demonstrate that you intend to become a permanent resident and that the property will be your main residence. If you are given consent, you must stay residing in New Zealand – if you stop, the property can be sold.
If you are attempting to buy in a company or trust, then it is worth noting that it will be counted as an “overseas person” if more than 25% is based overseas or if it is centrally controlled by someone overseas.
There are some exemptions in the case of new builds. Developers creating 20 units or more, such as large, multi-story apartment buildings, are able to sell a percentage of these homes to overseas buyers, without requiring consent from the Overseas Investment Office.
Source: Latest News from the Beehive | Beehive.govt.nz
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