What is the Overseas Investment Amendment Bill about?
The Overseas Investment Act regulates the purchase /investment in sensitive land or an overseas investment in significant business assets in New Zealand. Basically, if the asset is classified as sensitive land or significant business assets (as in the sale of utility company etc), then the foreign purchaser needs to obtain consent from the Overseas Investment Authority before they can go ahead. Originally most residential land was not classified as sensitive land so non citizens and non NZ residents could purchase it. Now, the Overseas Investment Amendment Bill reclassifies all residential land as sensitive land. This means if you are a non citizen or not ordinarily resident in New Zealand , you need consent before you can purchase houses in NZ.
The general principle in deciding whether foreigners can purchase houses is whether the foreigner is able to demonstrate it will benefit New Zealanders.
For example, if the foreigner wanted to buy land in order to develop and build new houses, then it is likely approval can be obtained. The benefit would be to increase the housing supply in New Zealand. The bill would require certain conditions for people who received consent to acquire land under one of the consent pathways above. For example, in most cases, if an overseas person purchased residential land to build houses on, they would be required to sell the land when the houses were built.
There are a number of exceptions. The most relevant one is for managed apartments that are leased to an hotel operation, as long as the purchaser cannot live in it for more than 30 days each calendar year and when the lease ends, they either lease it back to the management company or sell it.
Another exception includes new developments in apartments (dwellings with over 20 units) that are bought off the plans.