Overseas Investment Act – Amendments have legal effect
Amendments to the Overseas Investment Act 2005 (OIA) that restrict certain overseas people from buying residential land in New Zealand reported in our September newsletter came into force on 22 October 2018.
The new provisions affect the purchase of land that is rated as a residential or lifestyle property (residential land). This includes apartments, townhouses, and standalone dwellings in use unit title developments.
The effect of the amendments requires overseas persons to obtain consent from the Overseas investment Office (OIO) under the OIA before they can buy residential land in New Zealand. If consent is required:
- the agreement for sale and purchase must be conditional on OIO consent
- OIO consent must be granted before settlement; or
- pre-approved OIO consent, which is available for overseas persons buying a home to live in, must have been obtained before the sale and purchase agreement is entered into.
Every person purchasing residential land in New Zealand, including New Zealanders, must also sign a residential land statement prior to settlement.
A complex exemption regime exists for Australians and Singaporeans and the holders of Australian and Singaporean permanent resident visas who live in New Zealand.
Developers of large apartment developments (multi-storey buildings with at least 20 apartments per building) may also apply for OIO consent to authorise the sale of 60% of the new apartments to overseas persons. Purchasers of these apartments who are overseas persons must be investors only as they are not allowed to live in the apartments. Transitional provisions exist for buildings that are currently under construction – these provisions will allow overseas purchasers to live in the apartments.
There are a number of pathways for consent depending on the residency status of the purchaser, on their intended use of the land, and on whether it is otherwise sensitive under the OIA.
Please contact Vicki Toan, Deirdre Norris, or Nicole Warner for more information.
Matters Advised On
We have recently advised bodies corporate, unit owners, and body corporate managers on the following matters:
- the sale of common property
- licences to occupy adjacent land for the purpose of repair works
- allocation of repair costs
- termination of reinstatement schemes following the completion of repairs; and
- recovery of unpaid levies.
Source: Body Corporate Business update - Nov 18