Govt urged to backtrack on foreign-buyer bill
Valuable would-be immigrants might be scared off, MPS warned. reports.
A lobbying push is on from business, and people living in some regions, to persuade the Government to modify its planned laws banning foreigners from buying residential property in New Zealand.
Some, including several multimillionaires, have called for luxury homes and even whole regions to be exempted from the proposed law.
In submissions to the finance and expenditure select committee, Queenstown and Northland residents called on MPs to leave multimillion-dollar homes, and whole areas like Northland and Queenstown, out of its planned Overseas Investment Amendment Bill.
Amy Kirk from Queenstown told MPs she feared it could crash the district’s economy.
‘‘Fundamentally, restricting all overseas ownership within the Queensland Lakes District Council will have catastrophic effects on our local economy and our diverse population and will not solve the housing problem.
‘‘Put simply, luxury home buyers are not purchasing homes that would otherwise be available for regular working families to purchase.’’
Multi-millionaire Debra Schilling said the country risked losing the benefits of having wealthy people like herself bringing their money in.
‘‘I immigrated to NZ in 2001 and became a citizen in 2004. I currently own a home in Queenstown valued at more than $5 million. I pay taxes on that home. And I pay taxes on my income. I do not cost the Government anything as I do not have children in school or live off benefits.
‘‘This bill would have prevented me from becoming a valuable citizen of NZ. I support the economy that employs the people who need affordable housing and I sincerely wish the Government would act to help those families acquire their own homes. But preventing me from coming in and buying an expensive home would not have helped those families one bit.
‘‘We need to attract more wealthy individuals, not keep them out. It is people like me who provide the jobs everyone depends upon.’’
Northlander Chris Reid said in his submission: ‘‘If you are adamant on introducing this xenophobic bill, then please allow for regional variation. That is, if you feel it is needed in Auckland then so be it, but permit Northland to allow overseas buyers as I have seen no evidence to suggest there is an issue negatively impacting on Kiwis in Northland.’’
What’s the plan?
To ease the housing market, Labour promised to ban foreigners from buying homes. It was a plan coupled with a pledge to speed up home-building which has failed to keep up with population growth, especially in Auckland.
Who can buy?
Kiwis, permanent residents and Australians will be allowed to buy residential property. That last group has some submitters baffled, believing it to be wrong to allow one group of foreigners to buy homes here, but not others. What’s the penalty?
Those caught breaking the law could suffer financial penalties of three times their gains. Banks like ANZ are worried they could be deemed to have conspired to break the law if they accidentally help a foreigner break the law.
Will it work?
Some are telling the Government that the move will slow home-building by excluding foreign investment in new homes. Others call for a region by region approach, limiting bans to areas like Auckland, where there is a housing affordability problem.
The Property Council says there is no convincing evidence that the ban is needed, and points out that a similar ban in Australia did not affect house prices.
One submitter, Rob Dowler, believes the ban will be easily circumvented by foreigners investing by making non-recourse loans to residents to buy homes, on condition they get a share of the capital gains when the properties are sold.
Who’s against it? Housebuilders, millionaires, bankers, bach-owners, and many property owners.
Who’s for it?
Plenty of ordinary people, including many with surnames that would have seen them included in Labour’s infamous 2015 Chinese-sounding names blunder.
Submitter Roger Sun told MPs: ‘‘I think this bill is great, and will make the house price to be more affordable, the residential houses should be only for all New Zealanders. During the last three years, National government was doing nothing to stop overseas buyers and non-resident buying Auckland houses, they push up the prices, more and more Kiwis are renting, paying lots of rents to foreign owners in their own countries.’’