The Overseas Investment Office (OIO) regulates the Overseas Investment Act 2005 (the Act) which governs foreign investment in New Zealand.
When purchasing sensitive land (which now includes residential property) in New Zealand, you may need OIO consent. Whether or not you require consent depends on your residency status, and if purchasing under a company or trust, will be dependent on whether the entity has an overseas persons or is associated to an overseas person.
When purchasing residential land in New Zealand, all purchasers must complete an OIO Residential Land Statement, declaring their eligibility including their residency status and whether or not the purchaser requires OIO consent. A false or misleading statement is an offence under the Act, and a purchaser may be liable for a fine of up to $300,000.00.
Those who are eligible, those who are eligible to purchase with an exemption, and those who are not eligible.
1. New Zealand, Australian and Singaporean citizens, including their spouses or de-facto partners are eligible to purchase residential land regardless of where they may reside when purchasing.
a. New Zealand residents are eligible, but must fulfil three requirements to prove that they are “ordinarily resident” in New Zealand:
i. They must have been a resident in New Zealand for at least 12-months preceding their purchase;
ii. Be a tax resident of New Zealand; and
iii. Out of the 12-months preceding their purchase, the purchaser must have been physically present in New Zealand for 183 days or more.
b. Australian or Singaporean permanent residents are also eligible to purchase residential property but must meet the same three requirements set out above.
2. New Zealand residents, or Australian or Singaporean permanent residents, who do not meet the OIO’s “ordinarily resident” criteria, but intend on residing in New Zealand may apply for OIO consent to purchase residential property, or land to build a home on. These consents, if granted, may come with conditions to the purchase, for example, being required to be resident in the home for a specific duration, or be resident in New Zealand for a certain number of days.
3. Other visa holders, such as travel, student, and work visas, are not eligible to purchase residential property in New Zealand. An overseas person without any visas is not eligible.
Inheritance of residential land may be exempt; however, it is circumstantial. For instance, if the residential land was purchased subject to consent conditions, those conditions may transfer to the beneficiary of the inheritance. The regulations are complex, and it is best to seek further legal advice.
Residential land acquired as relationship property, where at least one of the parties to that relationship are a New Zealand, Australian or Singaporean citizen, or permanent resident visa holder that meets the OIO’s “ordinarily resident” requirement, is also exempt from requiring consent. Additionally, acquisition of residential land by an overseas person as a result of the division of relationship property may also be exempt. Again, proper legal advice should be obtained to assess the legal position.
If you require consent to purchase residential land, an application may take up to 10 working days, or if applying to purchase “otherwise sensitive land”, an application may take up to 30 working days.
Once granted, a pre-approved consent is valid up to one year, so you can choose to look at properties within the conditions of the consent once granted. Alternatively, a purchaser may choose to look at properties and apply for consent once they have a property in mind. “Foreign buyers” should not sign any agreements or declare their agreement unconditional before obtaining OIO consent as the consequences could be disastrous. For instance, a purchaser requiring OIO consent cannot bid at auction unless the purchaser has pre-approved OIO consent.
The costs for applying for consent can vary depending on what type of consent and/or exemption is required, so it is best to obtain legal advice before you begin your property finding journey. The process can be complex and require documents and information, so it is best to speak to your lawyer as soon as possible if you intend to purchase property as a “foreigner”.
If you have any questions, would like assistance with understanding your position as a prospective purchaser, or need to apply for consent, please contact us at email@example.com.
We have taken care to ensure that the information given is accurate, however it is intended for general guidance only and it should not be relied upon in individual cases. Professional advice should always be sought before any decision or action is taken.