Applying for Overseas Investment Consent to purchase a residential home in New Zealand
The “Overseas Investment Amendment Act 2018” (“the Act”) came into effect from 22 October 2018. The Act amends the Overseas Investment Act 2005 to restrict overseas persons from buying residential properties or buying land to build homes in New Zealand. Most overseas people are now unable to buy residential properties in New Zealand, but in some cases can apply for consent from the Overseas Investment Office (“OIO”). This article aims to give some guidance on who is eligible to apply for overseas investment consent and also some practical legal guidance on application procedures, timeframes and costs involved.
Who is an overseas person?
- With some exceptions being Australian and Singaporean citizens, anyone who is not a New Zealand citizen or is not ‘ordinarily resident’ in New Zealand will be deemed an “overseas person”
- “Ordinarily resident” is a clear test – the person must meet all of the following requirements:
- have a residence class visa
- they must have lived in New Zealand for the past 12 months, what is the difference between this and requirement below?
- that have been present in New Zealand for at least 183 days of the past 12 months,
- they must be a New Zealand tax resident.
About the consent
If you do not come within any of the exceptions and are not “ordinarily resident in New Zealand but you want to purchase property (which are not sensitive land ) in New Zealand you will need to make an application to the Overseas Investment Office for consent (“OIO Consent”).
To be qualified to apply you must meet all the following (you are required to make a declaration as part of the application):
- you wish to buy or build a home in New Zealand on residential land
- you have a New Zealand residence class visa, or are a permanent resident of Australia or Singapore
- you are not ordinarily resident in New Zealand
- the home will be bought in your name, or the name of you and other people
- you intend to live in the house as your main home.
It is important to be aware that you cannot sign an unconditional agreement without a consent, any agreement you enter into to purchase New Zealand property will need to be conditional on obtaining OIO consent. If you sign an unconditional agreement without obtaining OIO consent and settle the property, you may face penalties and may have to sell the property. If you make a false statement, you could be fined up to $300,000.
You can apply for pre-approval from the OIO before you find a property you want to buy. We strongly suggest you consult with your lawyer prior to making an offer to purchase property in New Zealand.
Conditions to meet after consent being granted
Once the consent is granted, there are certain conditions that the applicant has to continue to meet - the person who is named in the consent must:
- live in the property as their main home;
- be present in New Zealand for at least 183 days out of every 12 month period occurring after consent is granted;
- continue to hold a residence class visa or continue to be an Australian or Singaporean citizen or permanent resident.
If you are being audited and no longer meet the above conditions, you may have to sell the land, and/or face penalties and fines How much?.
Timeframe and cost of making an application
The consent fee for a simple consent application starts from $2,040 (GST inclusive) for an individual or group of individuals, or $3,900 (GST inclusive) for companies, trusts or limited partnerships. OIO have advised that simple applications could take up to 10 working days to process.
At Turner Hopkins, we can provide you with advice on applying for OIO consent and can assist you to prepare an OIO application.
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