Changes to the Overseas Investment Act 2005
The changes to the Overseas Investment Act (the Act) will take place from 6 March 2026. The main point from this is that investors can now buy properties for over $5 million in certain circumstances. The following breaks down what the Overseas Investment Office (OIO) expects and how you can ensure that you comply with the new changes.
Can I go out and buy any property with no restrictions?
No, but you can get consent to buy a property. To be eligible, you must have an Active Investor Plus Visa (issued from 2022) or hold a category Investor 1 or Investor 2 Visa (issued between 2009 and 2022).
Does the property have to be in my individual name?
No, there is scope for companies and trusts to hold the properties. If the property is to be bought by a company, as an overseas investor, you must hold at least 25% of the shareholding. There can be New Zealand citizens that also hold the shareholding but there cannot be other non-New Zealand citizens who hold more than 25%.
What type of property can I buy under these changes?
You can buy property that is classed as Residential Land or Lifestyle Land. This is not the same as a Council’s zoning areas. This can be checked by your lawyer. The property must also not be “otherwise sensitive land”. This includes land that is:
1. Adjoining to seabed or foreshore and is greater than 0.2ha
2. Rural and greater than 5 ha
3. On seabed or foreshore
4. On certain islands and is greater than 0.4ha
5. On any other islands
I have found a property that is priced at $5,000,0001, am I good to go?
Not necessarily. The OIO requires the value of the dwelling and the land to be at least $5 million which excludes any chattels. For a property of that value, the OIO do not expect those chattels to effectively be worthless. There is an expectation that a property purchase allocation is completed which determines the proportion of value given to the land. For example, a purchase of a property with a dwelling on it is $6 million and the allocation is $5.5 million to land and $500,000 to the chattels in the dwelling. This would satisfy the requirement of at least $5 million.
I have found land, but it is only going to cost me $3.8 million, what can I do?
The OIO has confirmed that if the build and land combination is greater than $5 million, then the consent will be granted. The OIO will monitor the build process to ensure that they are satisfied that the $5 million requirement is met.
The property I want to buy is worth $1 million but the vendor has offered their $4 million sports car so I can hit the $5 million requirement, will this work?
The OIO has said that any extra considerations will not be accepted as meeting the $5 million requirement. The $5 million must solely be for the land and dwelling – not including chattels, or for the land and dwelling to be built.
The OIO has said no to my consent, why have they declined it?
There are four reasons why the OIO will decline a consent:
1. The purchase is less than $5 million
2. You do not have the right visa type
3. The land is “otherwise sensitive land”
4. Contrary to national interest. This may mean there is some threat to New Zealand’s national security.
What is it going to cost me to get the consent?
The fees charged by the OIO are $2,040 for a purchase above $5 million. If you are relying on building to reach the threshold, the fee is $3,500 or if there is a national interest assessment required, $83,700.
What can I do to be considered “ordinarily residing” in New Zealand?
This can be achieved by:
1. Having an NZ residence visa
2. Residing in New Zealand for at least the immediately preceding 12 months
3. Being a tax resident by being in the country for 184 days out of those 12 months
I have a 33% share in the company, does that mean the property we buy needs to be $15 million?
No, the OIO looks at these purchases from a transaction point of view. They do not separate the ownership, so a $5 million purchase price will be sufficient.
If you are looking to buy as one of these investors, get in touch with Brayden Cottom to help guide you through the process.