FEATURE
Helping overseas buyers follow the rules
New Zealand is a great place to live, and property here is in high demand. This includes demand from overseas buyers for different types of real estate.
Overseas investment coming into New Zealand is vital for a buoyant economy. It brings new capital, generates jobs and builds our international trade connections. However, it is important overseas investment is high quality and in the best interests of New Zealanders.
There is a new, simplified ‘investor test’ which overseas investors must meet to invest in New Zealand. Repeat investors who have already passed the new investor test no longer need to pass the test each time (provided nothing has changed), meaning faster application processes.
That’s where the Overseas Investment Act comes in. The rules in place require some overseas investment be screened to make sure the standards are met and, where necessary, steps are taken to manage risks.
In addition, the lease period threshold for when leases of sensitive land need overseas investment approval has increased to 10 years.
The rules apply to overseas people and businesses buying real estate in New Zealand. Different requirements are in place for different types of real estate. There are rules covering purchases of farms, forestry blocks and mixed-use rural land, commercial and industrial property, and tracts of land for housing development, as well as houses and apartments. Land purchases by an overseas buyer will usually require some sort of approval under the Act.
The rules are changing It’s important to know that the Overseas Investment Act is changing, with new rules in effect from 5 July and more changes coming. The reforms are designed to reduce the screening of lower risk investments, increase the focus on higher risk investments and simplify the requirements for investors. Several rule changes will impact overseas buyers of real estate, especially larger purchases by overseas investors and investors who make multiple purchases.
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The Real Estate Institute of New Zealand
Anna Wilson-Farrell, Group Manager, Overseas Investment Office
Later this year the advertising requirements for farm land sales will be strengthened and updated to ensure New Zealanders have the opportunity to purchase land ahead of advertising to overseas investors.
Buying a house or apartment Following law changes in 2018, most overseas people are not able to buy residential property in New Zealand, however there are two exceptions. People who have a residence class visa and intend to live in New Zealand can apply to purchase a home to live in. Overseas people can also make an investment in an apartment bought off the plans in a new development, or where the developer holds an exemption certificate (there is a handy list of exemptions on our website). Different rules apply to Australian and Singaporean citizens because of free trade agreements with New Zealand.
Good advice from a real estate professional Breaches of the Overseas Investment Act can easily be avoided. The
