Late last year parliament had its first reading of proposed changes to the Overseas Investment Act (“the Act”). Following consultation, a report is due back in parliament on the 30th of May.
Major Changes Likely
The Overseas Investment Bill, provided it is approved without significant changes, will make major changes to the purchase of residential property by overseas persons. The bill makes all Residential Land and Lifestyle Land subject to the Act, which includes vacant land capable of having a single or multiple dwellings built on it.
The changes will prevent overseas persons from purchasing residential land, unless consent is first obtained from the overseas investment office (OIO) and the overseas purchaser meets criteria for the provision of consent.
Criteria for purchase
The criteria require an overseas person being able to either show a commitment to New Zealand, a benefit to New Zealand or that the proposed plans for the property will increase housing on residential land in New Zealand i.e. they are purchasing residential land to build one or more residential dwellings. Each of these tests has specific criteria.
If the current bill passes into law an overseas person making an offer on a property will need to either make that Agreement conditional upon obtaining OIO consent, or obtain the consent from the OIO prior to entering into the Agreement.
This is likely to limit the number of overseas persons purchasing properties in New Zealand to either those immigrating and intending to live in New Zealand long term, or those carrying out development projects.
At this stage the bill hasn’t yet been approved and changes may still occur.