From 22 October 2018, amendments to the Overseas Investment Act 2005 requires non-New Zealand citizens wanting to purchase property in New Zealand to firstly check they are eligible to apply to buy or build a home to live in. Some clients will be required to obtain consent first.
You can check whether you are eligible to apply on the New Zealand Now website.
This simple guide also gives you an overview of the rules or you can use the flowchart. It is important to find out whether you need consent BEFORE you sign a sale and purchase agreement as there is specific penalties if you don’t obtain consent first.
Once you have determined that you need consent from the OIO to buy or build a home to live (that is classified as residential or lifestyle), you apply to the OIO for consent. You must apply as early as possible in the purchase process. You should apply for pre-approval before you have even started looking to purchase a property. You will then need to give us your OIO consent number. Simple consents can take up to 10 working days to be granted and the fee for individuals is $2,040.00 NZD.
While you can still sign a sale and purchase agreement without consent, you must make sure you tell the real estate agent that the agreement is to be conditional for a minimum of 15 working days upon consent being granted. If we are going to be your lawyers, you can always ask us to review the agreement before you sign it.
If you need consent, but sign an unconditional agreement without it (this includes winning at auction), you may face significant penalties and have to sell the property. If you make a false statement, you could be fined up to $300,000.00 NZD.
If you are granted consent, there are certain conditions you must meet which are set out in the Overseas Investment Act 2005. Generally these are: those named in the consent must – live in the property as their main home; be present in New Zealand for at least 183 days in each 12 month period after consent is granted; continue to hold a residence class visa, or continue to be an Australian or Singaporean citizen or permanent resident. If you don’t meet these conditions, you may have to sell the land and/or face penalties and fines. These conditions will cease to apply if you become a New Zealand citizen or become ordinarily resident in New Zealand.
If you are a couple, you don’t both need consent if you are buying the home as relationship property. This includes people who are married, in a civil union, or a de facto relationship. If one of you is a New Zealand citizen, then neither of you need to apply for consent. If one of you holds a residence class visa, has been living here for the past 12 months, has been present in New Zealand for at least 183 days in the past 12 months, and is a tax resident, then neither of you need to apply for consent.
When you are ready to buy a home, contact us at Gina Jansen Lawyers and we will guide you through this process. We will ask you to complete a Residential Land Statement to see whether you are eligible to buy. It is very important that you talk to us BEFORE you sign a sale and purchase agreement with a real estate agent or privately.