Overseas Investment Amendment Bill

In the April newsletter, we advised that the Overseas Investment Amendment (OIA) Bill was before the Finance and Expenditure Select Committee. The Select Committee reported back to Parliament on 18 June recommending (by majority) that it be passed, with some amendments.

The Bill seeks to limit the types of property that can be purchased by people overseas by bringing residential land into the category of 'sensitive land' in the Overseas Investment Act (OIA). This means that overseas people who are not 'ordinarily resident in New Zealand' would generally not be able to purchase existing houses or other land classed as 'residential' under the Bill.

The Select Committee recommended various changes to the Bill including:

  • supporting large developments (both residential and hotel supply)
  • an exemption for network companies providing essential services
  • clarifying the position for leases and periodic tenancies
  • streamlining the approval path for residential land
  • reducing the compliance burden on conveyancers
  • clarifying the regulation-making powers (including more detailed exemption-making powers)
  • expansion of the definition of 'ordinarily resident in New Zealand' to include all people who hold a resident visa.

The Select Committee also considered a Supplementary Order Paper (SOP) that proposed that forestry rights and regulated 'profits à prendre' (a type of interest in land that gives the holder of the interest the right to take part of the land, for example, cut and remove timber) be included within the scope of the Overseas Investment Act. The SOP set out new tests for consent to streamline and speed up the processing of applications where an overseas investment in sensitive land relates to forestry. The Select Committee recommended some changes to the SOP regarding the use of the new tests and standing consents.

The minority of the Select Committee (the New Zealand National Party and ACT New Zealand) oppose the Bill and say that "… it will negatively affect the development of new housing in New Zealand at a time when we need to grow our housing stock and will hamper the ability of New Zealand businesses to access foreign capital".

The next step is for the Bill to have its second reading in Parliament (no date is set for that yet).

You can read the Bill and the Select Committee’s report here(external link).

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