The Overseas Investment Amendment Act 2018 came into force on 22 October 2018.
The changes prevent certain overseas people from buying residential property in New Zealand. With some exceptions for Australian and Singaporean citizens, anyone who is not a New Zealand citizen or is not ‘ordinarily resident’ in New Zealand, is an overseas person.
Ordinarily resident is a clear test of four parts – the person must have a Residence class visa, must have lived in New Zealand for the past 12 months, have been present in New Zealand for at least 183 days of the past 12 months, and be a tax resident.
Residence class visa holders as well as Australian and Singaporean permanent residents that are not ordinarily resident in NZ can apply to the OIO for consent to buy one home to live in.
The new regime applies to land that is categorised as ‘residential’ or ‘lifestyle’ under the District Valuation Roll and while this includes most houses, flats, and apartments, there are also fairly large lifestyle blocks that are considered residential.
One way to check is to use a property website, such as www.qv.co.nz (link is external) and look for the ‘Building Type’. Properties with the Building Type ‘residential’ or ‘lifestyle’ are captured by the new regime. Some councils also provide this information.
Another important aspect of the regime is the Residential Land Statement that every purchaser is now required to make. The statement is completed by the purchaser and provided to the conveyancer, who must retain a copy for at least seven years. There are significant penalties for both conveyancers who do not comply, and for purchasers who make false statements.
Other ways overseas people can buy residential land:
There are opportunities for overseas people to buy residential land, but not live in it.
- If you are a property investor/developer who adds to New Zealand’s housing supply by developing the land and on selling new housing; or building and possibly operating long-term accommodation facilities.
- If you want to use residential land for non residential purposes. This could include industrial or commercial uses such as a motel, hotel or offices.
- If you need to use land for a residential purpose incidental to a core business purpose (eg: staff accommodation) and no reasonable alternative is available.