FEATURE
“ That’s it, I’m moving to New Zealand” As COVID-19 cases spike across the globe, there is a lot of media interest in New Zealand, with even The Guardian reporting many people are longing to escape to our small South Pacific country. The popular refrain is: “That’s it, I’m moving to New Zealand!”
Unfortunately, many news items are also reporting incorrect information about the ‘One Home to Live in Pathway’ managed by the Overseas Investment Office. This legislation has been in place since October 2018 when the Government changed the Overseas Investment Act to put restrictions on overseas people buying residential property in New Zealand. The rules have not changed. If an overseas person wants to buy a home to live in, they need to be ordinarily resident in New Zealand or a citizen. The only exception is that people from Australia or Singapore can buy land that is residential only without consent from the Overseas Investment Office. This is because of New Zealand’s free trade agreements with these countries.
Recent consents Between 1 October 2019 and 19 August 2020, the Overseas Investment Office received 214 applications, with all being approved. The total value of the homes purchased with consent during that period is $122 million. Auckland is the top region for consents, followed by Canterbury and Wellington, with applications received from citizens of over 30 countries. The highest number of applications came from citizens of the United Kingdom (28%), closely followed by Chinese citizens (26%). South Africa follows with 12%.
Overseas purchaser eligibility The most important thing any overseas person can do when looking to buy a home in New Zealand is to check if they are eligible to do so. While most overseas people are following the rules, it’s critical that overseas people look at the criteria on the Overseas Investment Office’s website
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The Real Estate Institute of New Zealand
Grant Barrott, Manager Residential, Overseas Investment Office
or talk to us. As agents, you are also critical in providing advice to potential purchasers before they make the important decision of buying a house. If an overseas person fails to apply for consent, the Overseas Investment Office can impose a range of penalties. These include fines or requiring people to sell their properties. The Overseas Investment Office is actively monitoring over 200 consent holders to ensure they abide by their obligations under the Overseas Investment Act. This includes monitoring their visa status, time spent in New Zealand and whether they are residing in the home.
Your role So, what can you do to help people comply? Encourage them to get pre-approval from the Overseas Investment Office before purchasing their home, if they need to. This ensures they are guaranteed consent to buy and you will then avoid potential penalties or the forced sale of the property in future. Consent takes up to 10 working days to be granted, but usually applications are processed in 2-3 days. Purchasers can still sign a sale and purchase agreement without consent, provided the agreement is conditional on consent being granted.
Consent conditions Remind purchasers that if they are a New Zealand resident or have a permanent resident visa but have not lived in New Zealand for a full year, they need to get consent to buy. Once consent is approved, it allows New Zealand residence class visa holders to purchase homes before they complete the full year of living in the country. The consent conditions will cease to apply once they become ordinarily resident.
