Attention: Foreign Buyers! Overseas Investment Act Update 21 Aug 2018
Several months ago we wrote an article on the key changes to the Overseas Investment Act coming into force later in the year (the article can be found here). The Overseas Investment Amendment Bill passed its third reading on Wednesday the 15th of August and received royal assent on Wednesday the 22nd of August. The changes are expected to come to effect in October 2018.
These are the key changes that you need to be aware of if you are a non-resident foreign buyer hoping to purchase property in New Zealand:
Scope of “sensitive land” to include “residential land”
The biggest change to the Overseas Investment Act is that the scope of “sensitive land” within the overseas investment regime is being broadened to include “residential land”. This is going to make it more difficult for overseas investors to purchase residential land in New Zealand, as they will need to apply for consent from the Overseas Investment Office which will require that the investment is going to, or is likely to, benefit New Zealand.
You will not need to apply for consent if you hold a residence class visa, have been living in New Zealand for at least 12 months, have been present in New Zealand for at least 183 days of those 12 months and are a New Zealand tax resident.
We have also published a more detailed article on the effect of this change, which can be accessed on our website here.
Forestry rights and interests:
The amendment will also impose stricter regulations on the purchase of forestry rights and interests, requiring the application for consent under one of two pathways – the “modified benefits test” or the “special benefits test”.
It should also be noted that it will be the obligation of the purchaser to ensure that they are complying with the Overseas Investment Act. Purchasers will be required to make a statement, which is to be prescribed by the Overseas Investment Office, confirming whether or not the Act applies. Without this statement, conveyancers will not be able to complete the purchase.
If you would like to have a look at the Overseas Investment Amendment Bill, you can access it here.
If you have any questions or concerns arising out of this article, please feel free to get in touch. This article is not a substitute for legal advice and you should talk to your lawyer about your specific situation.