Legislation introduced by the Government at the end of last year and expected to be passed soon will tighten the rules around foreign ownership of residential property. In the main, only New Zealand citizens, Australian citizens or New Zealand permanent residents who satisfy certain conditions will have the right to buy a home here without being put under the microscope by the Overseas Investment Office.
The changes proposed are amendments to the Overseas Investment Act 2015 which the Government is keen to push through the legislative process as quickly as possible to beat a possible signing of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) agreement. If the legislation is passed before the CTTPP is signed then it won’t breach the agreement, although it might breach one with Singapore. If outstanding issues with Singapore are not worked out ahead of the final legislation passing, the Government says they’ll include an exemption for Singaporeans – similar to the one already included for Australians.
Other exceptions would include allowing foreigners to buy residential property if they can prove it has wider benefits to New Zealand. These benefits would include increasing the housing supply by allowing overseas buyers to buy land and build a new home on it provided they on-sold it, or buying then knocking down an existing home if they build more than one home on the land.
New Zealand and Australian citizens will still be able to buy residential property irrespective of where they live. Holders of New Zealand permanent resident visas will also be able to buy residential property if they have been living here for at least 12 months, and have been present in the country for at least 183 days in the past 12 months.
Those on temporary visas (e.g. student visa, work visa or visitor visas) would not be able to buy a house to live in and it’s important to clarify the differences between resident and permanent resident visas, as only permanent resident visa holders will be able to buy property.
Both resident and permanent resident visas give the visa holder a right to live and work in New Zealand indefinitely. The fundamental difference is that a resident visa holder who leaves New Zealand may only travel to and be granted entry permission as a resident if the conditions of the visa allow, known as travel conditions. Most resident visas are initially granted with two years of travel conditions, which may be extended.
A permanent resident visa, on the other hand, entitles the holder to travel to and be granted entry permission as a resident indefinitely.
If you have any questions about foreign investment in New Zealand or investment, residential or business visas, please contact your lawyer for professional legal advice that will give you peace of mind.