Residential Land or Not?
Amendments to the Overseas Investment Act 2005 (OIA) that restrict certain overseas people from buying “residential land” in New Zealand came into force on 22 October 2018.
The effect of the amendments is to require overseas persons to obtain consent from the Overseas investment Office (OIO) under the OIA before they can buy residential land in New Zealand. The requirements are:
- the agreement for sale and purchase must be conditional on OIO consent, and OIO consent must be granted before settlement; or
- a 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.
From 22 October 2018, all transactions involving the sale and purchase of residential land require purchasers to complete a Residential Land Statement (RLS) prior to or at the time of settlement. The RSL requires purchasers of residential land to identify whether:
- they are citizens of New Zealand, Australia, or Singapore (and are exempt from the OIA residential land regime)
- they are New Zealand, Australian, or Singaporean permanent resident visa holders who live in New Zealand (and are exempt from the OIA residential land regime)
- they are New Zealand resident visa holders who live in New Zealand (and are exempt from the OIA residential land regime)
- they have consent to purchase residential land from the OIO; or
- the purchase is covered by an exemption certificate issued by the OIO to the developer of a large apartment complex.
It is, therefore, important for purchasers to know whether land is residential land or not so that they can determine whether they need OIO consent or not.
Residential land is defined as land that has a property category of “residential” or “lifestyle” in or for the purpose of the relevant district valuation roll. Sometimes, a property’s property category is called its land use or building type. Information about a property’s property category can be found on most council websites under rating information or on www.qv.co.nz.
Some residential land will also be “sensitive land” under the OIA. If land is residential land and sensitive land, different criteria and consent pathways will apply.
For more information, please contact Deirdre Norris, Vicki Toan, or Nicole Warner.