New Zealand: Are you, as a non-resident, thinking of buying a house in New Zealand?

Last Updated: 24 April 2018
Article by Nicola Tiffen and Tim Stevens


What do the proposed changes in the Overseas Investment Act mean for you?

What is the Overseas Investment Act (OIA)?
The OIA currently requires overseas persons to obtain permission from the Overseas Investment Officer (OIO) before they can purchase sensitive New Zealand (NZ) land.
At the moment, sensitive land is more than 5 hectares of non-urban land or is conservation land (including lake or sea foreshore) or land that adjoins such land.

What are the proposed changes?
The Labour government has introduced a Bill, called the Overseas Investment Amendments Bill (Bill).
The aim is to change the OIA so that overseas persons who are not resident in NZ cannot buy existing houses or residential land, without first obtaining permission from the OIO.
To achieve this aim, the Bill extends the definition of sensitive land to include land that is rated for residential or lifestyle purposes under the relevant district valuation roll.
The Bill also extends the definition of overseas persons, when it comes to the purchase of residential property.

Who is an "overseas person" under the Bill?
An overseas person is someone who is not a NZ citizen nor ordinarily resident in NZ.

What does "ordinarily resident" mean under the Bill?
This means someone who has a permanent resident visa and has been residing in NZ for the last 12 months and spent at least 183 days of those 12 months inside of NZ.

What does this mean, if the Bill becomes law?

It will mean that if you are not a NZ citizen and you want to buy an existing home, in NZ, you must either:

  1. Have permanent residence and have been living here for 12 months and have spent at least 183 days of those 12 months in NZ or;
  2. Have permission from the OIO to buy the house.

What is permanent residence? Do I have it?
Permanent residence means a visa that entitles the holder to travel to NZ at any time, and to stay in NZ indefinitely.
Most people, when they are first granted residence, are given a resident visa that has a time limit on when they can travel in and out of the country.
Therefore, if you have a travel expiry date, on your residence visa, you do not have a permanent resident visa and cannot buy a home without first obtaining OIO permission.

What is the criteria for the OIO to give me permission to buy a house?
You will have to meet the "commitment to NZ" test, or that you will "increase housing on residential land", or show that the purpose will be of "benefit to NZ". If you wish to try to meet the "commitment to NZ" test, you must:

  • Have a resident visa and meet the requirements for showing commitment to reside in NZ for that visa type; or
  • Be from a country that is exempt from this requirement, such as Australia, and meet the requirements for showing commitment to reside in NZ.

It seems likely that the requirements for showing commitment to reside in NZ will be in separate regulations. However, the Immigration Act 2009 provides that a residence visa holder will demonstrate a commitment to NZ if he or she meets one of the criteria below.

  • Spends at least 184 days inside of NZ in each of the two preceding years.
  • Has tax residence status and has spent at least 41 days inside NZ in each of the two preceding years;
  • Has a resident visa under the Business Investor category and has maintained the investment for more than two years;
  • Has established a business in NZ and has spent at least 184 days inside NZ in the preceding two years;

You will also need to show that you have the necessary business acumen for the purchase and meet good character requirements.

If I get permission to buy a home, under the "commitment to NZ" test, will there be any conditions?
Yes. You will need to either build your home within 12 months or live in the house that you have purchased for at least 12 months.

What does this mean for me, if I have just been granted residence? If you don't buy a home before the law changes, then you may need to wait to purchase a home until you have obtained your permanent resident visa.
When and how you qualify for a permanent resident visa will depend on your current resident visa. We recommend speaking to an experienced immigration lawyer before you apply. In some cases, you can progress straight to a permanent resident visa from a temporary visa. Our immigration team would be happy to give you advice.
If you want to apply for permission to buy a home, through the OIO, then we can also assist you with proving that you meet the "commitment to NZ test" or perhaps one of the other two tests. We also have a team that specialises in OIO applications and who works closely with our immigration team.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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