Pitfalls of foreign buyer law

A Britain-born New Zealand permanent resident says he has been cut out of the property market by restrictions on foreign buyers, because his job requires him to spend time overseas.

Residential land can now only be sold to people who are citizens or permanent residents, with exceptions for Australians and Singaporeans.

But people with a residence visa need to meet conditions. They must have a residence-class visa, must have lived in New Zealand for the past 12 months, have been present in New Zealand for at least 183 days of the past 12 months, and be a tax resident.

Richard Moore moved to New Zealand to serve with the police in Northland as a strategic intelligence analyst in 2005 and bought a house in Whanga¯ rei. He became a permanent resident in 2010.

He has since taken roles with the United Nations, and is currently serving as a security analyst in the department of safety and security in

Austria. He has also been posted to Nigeria, Cambodia and Lebanon.

Moore sold his Whanga¯ rei house in 2016 with the plan to buy land further north to build a home for his retirement. But he has found his job might make that hard to do.

‘‘In May this year I flew back to New Zealand – the UN classifies this as my place of origin and they give me a return flight every two years – to examine a list of plots up in the Far North. Deciding on one, I obtained a Lim report and instructed my lawyers to check out the property.’’

A bank told him he might be ineligible to buy the property. His lawyers confirmed it.

‘‘Basically since the introduction of the Overseas Investment Amendment Act 2018, I am no longer considered an ordinary resident, having been outside New Zealand for six months in the past 12 months, and thus am ineligible to purchase property or land.

‘‘I could apply for special dispensation, which would cost $2600 nonrefundable but I would still be required to sign an undertaking I intended to return to New Zealand in the next three months and live there for the next 12 months uninterrupted,’’ Moore said.

‘‘Working for the UN, this was not going to happen. This really is an insult to those who dedicate their lives to serving in the international community and represent New Zealand while they do so.’’

Moore said he had previously applied for citizenship, which would allow him to buy a house from overseas, but he had spent too much time out of the country in the previous five years.

Eric Crampton, chief economist of the NZ Initiative, said this was always going to be an implication of the law.

‘‘The foreign buyer ban was always going to have perverse consequences. While Labour promised ... legislation that would prevent foreign speculators from driving up house prices, the legislation went well beyond that to include lots of people who could hardly be considered speculators.’’

Crampton said he warned in March last year that the ban would stop scenarios such as a British doctor buying a house in Greymouth and setting up practice on a work visa there.

‘‘The ban was also certain to catch residents who have been living in New Zealand for a long time but who wound up having to spend seven months abroad due to a family health emergency – or residents who have taken a short-term posting abroad. ‘‘The legislation was too broad. ‘‘And, it was implemented with the worst of intentions. It catered to a xenophobic, populist view that foreigners shouldn’t be able to buy houses here, where lots of Kiwis seemed to believe they would be banned from buying houses abroad.

‘‘But bans like New Zealand’s are rare,’’ Crampton said.

Housing Minister Megan Woods has been approached for comment.

‘‘This really is an insult to those who dedicate their lives to serving in the international community and represent New Zealand while they do so.’’ Richard Moore, pictured