Foreign home-buyers’ ban on way
Trade Minister David Parker will introduce legislation into Parliament today to ban foreign buyers from owning existing homes in New Zealand.
The legislation is expected to be passed in the new year, well before a possible signing of the Trans-Pacific Partnership (TPP).
It will amend the Overseas Investment Act so that only citizens and permanent residents will be able to buy property without scrutiny from the Overseas Investment Office (OIO).
Permanent residents and Australians would have to have resided in New Zealand for at least 183 days of the past year in order to buy a property without screening.
People holding other resident class visas would have to undergo screening, and anyone on a temporary or student visa would not be able to buy a house at all.
‘‘Purchases of homes by offshore speculators push first homebuyers and families out of the housing market,’’ Housing Minister Phil Twyford said.
Two exemptions were available. The first would allow anyone to buy land and build a new home on it provided they onsold it, thus adding to housing supply. Buyers intending to knock down an existing home to build several more would also be exempt.
The other exemption would allow people intending to live in New Zealand good leeway if they could prove that intent.
‘‘We do not want to deter people who have the genuine intent to make New Zealand their home and contribute to the country,’’ Twyford said.
‘‘We want to encourage foreign investment in the building of new homes.
‘‘The National government said it couldn’t be done without breaching trade agreements. They just didn’t try and in doing so, they put foreign buyers ahead of New Zealanders.’’
Twyford said all three parties in the coalition had long called for some type of ban on foreign buyers.
‘‘The National government said it couldn’t be done without breaching trade agreements. They just didn’t try and in doing so, they put foreign buyers ahead of New Zealanders.’’
Housing Minister Phil Twyford
‘‘We campaigned on it and now we’re delivering that promise.’’
If the legislation was passed before the TPP was signed, then it would not breach that trade agreement. The only free trade agreement that it might breach would be one with Singapore.
Twyford said that if the outstanding issues with Singapore were not worked out ahead of the final legislation passing, a further exemption for Singaporeans – much like the one for Australians – would be built into the law.
Land Information Minister Eugenie Sage said the law would likely go through a truncated select committee process in order to beat the possible signing of the TPP.
Once it was the law, foreign buyers would have to prove that their purchase had benefit for the country.
‘‘For practical purposes, foreign buyers will not be able to buy residential property unless they are either increasing the number of residences and then selling them or converting the land to another use,’’ Sage said.
National Party land information spokesman Gerry Brownlee said the ‘‘ban’’ wasn’t really a ban.
‘‘It’s even clearer now that this not an actual ban. They are simply applying the existing sensitive land test to residential land. This is further watering down of their original announcement.’’