Foreign buyer screening law reported back

The Bill putting in place the Government’s policy of banning overseas buyers of existing houses has been reported back to Parliament by the Finance and Expenditure Select Committee.

 “This law will ensure that the market for our homes is a New Zealand market not an international one,” Associate Finance Minister David Parker said.

 It’s also a matter of values. We believe that from the most expensive seaside and lakeside properties to the most modest homes in our towns and cities New Zealanders should not be outbid by wealthier foreign buyers.”

The Bill supports the creation of new housing and the KiwiBuild policy by better harnessing foreign capital and directing it towards large residential developments.

 Under the new regime, overseas investors will be able to invest in new housing, particularly apartments, new rentals, and homes available to purchase under rent-to-own or shared-equity arrangements.

“This will help first home buyers to get their foot on the property ladder,” David Parker said.

All permanent residents and resident visa holders who spend the majority of their time in New Zealand will be able to purchase homes under the regime without obtaining consent.

Australian and Singapore citizens and residents will be treated the same as New Zealand citizens and permanent residents.

If the current number of Singapore buyers materially increases the two countries have agreed to meet to discuss the cause of the increase and how to address it, if required.

Other recommended changes will simplify the process for buying residential land for commercial purposes, such as hotels, supermarkets and businesses that create jobs and support our communities.  This includes an exemption for utility companies, reflecting the importance of these services to all Kiwis.

We have also rationalised forestry investment by including forestry rights, which are a means of buying forests which needs to be covered, and then applying a light-handed regime to encourage foreign direct investment in forests.

These rules can be changed in future but could not be altered if forest rights were not included within the Bill now.

More information can be found here: https://treasury.govt.nz/publications/information-release/residential-land-changes-overseas-investment-amendment-bill