Overseas Investment- Changes to come
In her first post-cabinet press conference on 31 October 2017, Prime Minister Jacinda Ardern announced that overseas buyers will be banned from buying existing houses from early next year.
While there are few details of how the ban will operate, it appears that:
- the Overseas Investment Act 2005 will be amended to classify residential housing as “sensitive” with amendment legislation to be introduced into Parliament before Christmas;
- non-residents and non-citizens (apart from Australians) will be prohibited from buying existing houses; and
- foreign investors will still be able to buy bare residential land for the purpose of building a house on the land, and perhaps also off the plans in new developments (but this second point is uncertain at present).
The shape and form of the amendment legislation will require careful scrutiny. The current legislation does not provide for an outright ban or prohibition on foreign investment. Rather, the legislation requires that overseas people must obtain consent from the Overseas Investment Office before they invest in sensitive land, significant business assets, and fishing quota.
We will be following these changes with interest and will provide further updates as more information becomes available.
Source: Agent Brief December 2017
Author: Sarah Leppard