In these uncertain times many people are looking further afield for safer places to invest their funds or an alternative destinations to spread their portfolio risk. New Zealand is becoming an ever more popular investment destination because of its stable political environment, excellent quality of life and distance from the rest of the world.
Can foreigners purchase property in NZ?
The answer is generally yes, a non-resident can purchase a regular house or section of land without any restriction. The only exception is if the property is classified as being “sensitive land”, if this is the case OIA consent is required prior to purchasing.A standard suburban house would not be classified as sensitive, however farms, lifestyle properties and holiday or waterfront homes could fall under this category. See thelegislationfor a more detailed description of sensitive land. If you are purchasing a property which requires OIA consent or if you are unsure whether or not it does, then you need to include an OIA consent condition in your Sale and Purchase Agreement. This will give you the opportunity to consult with your lawyer and apply for consent if necessary.
What is OIA consent and how does one apply for it?
OIA (Overseas Investment Act 2005) Consent is required for overseas persons and their associates wishing to purchase sensitive land in New Zealand. An overseas person is anyone who is not a New Zealand citizen and does not normally reside in New Zealand. According to the regulations a company, partnership, Joint Venture and a trust can also be an overseas person. Determining whether OIA consent is required and the actual application process can be tricky so it is essential to engage a lawyer who has experience in this area. OIA consent is granted by the OIO (Overseas Investment Office) based on several criteria including whether the transaction will benefit New Zealand and if the investor is intending to reside indefinitely in New Zealand. Each application is assessed on a case by case basis.
Does owning property in New Zealand entitle you to residency?
No, foreigners can own land in New Zealand but this does not automatically entitle them to stay in the country beyond the limits of a visitor’s visa. It is still necessary to go through standard immigration channels to apply for residency or citizenship. More information about applying for residency and the application criteria can be found atImmigration New Zealand.
Do you need to physically come to the country to complete a purchase?
No, my firm regularly acts for clients based overseas who buy and sell New Zealand property without needing to physically come to the country to complete the settlement. We manage this by emailing all the required documentation to the client who gets it signed and witnessed in front of a notary public in their country of residence and returned to us by courier.
What are the most common mistakes overseas investors make when purchasing property in New Zealand?
In my experience most easily avoidable mistakes stem from failing to get legal advice before entering into a Sale and Purchase Agreement. Many foreigners don’t realize that once you have signed a Sale and Purchase Agreement you are legally bound to this contract, there is no “cooling down period” after signing as is the case in many countries and you cannot back out of the agreement if you change your mind. This means that its essential to get legal advice prior to signing the agreement so that you know what type of land you are agreeing to purchase and can include relevantconditions(such as finance, builder report, OIA consent etc) in the contract.
Conveyancing Shop Lawyers Limited