The PeriOIOdical - December 2018

21 December 2018

Kia ora koutou

The Overseas Investment Office (OIO) is proud to have been part of big changes in the way overseas investment is managed this year. We’ve introduced new processes and expanded the team to manage the new rules launched on 22 October.

And there is a lot of continuing work to help our office run even better. An important element is hearing your views about the OIO so we can make your experience easier and better. We are very interested in capturing insights from key people who interact with our office and overseas investment activities. This will be a focus for us in January and February 2019 and if you would like to help inform on-going service improvements please get in touch.

If you have questions about any aspect of the OIO, please check with the team by phoning 0800 665 463 or emailing.

More change is ahead as the Government embarks on the second stage of its overseas investment review. The OIO will be collaborating with Treasury, which is the policy lead for this. Next year there will be a call for public submissions to help shape the direction. Please take the opportunity to have your say.

Thank you for your interest in the OIO and our work this year. I wish you a relaxing holiday season with your friends and family and I look forward to meeting more of you next year.

Ngā mihi nui

Vanessa Horne
Group Manager, Overseas Investment Office
Land Information New Zealand

 

This issue covers:

When a resident isn't a resident
First transitional exemption certificate 
Changing approach to overseas investment 
OIO investigations into Agria

When a resident isn’t a resident

We recently discovered an overseas person who had agreed to buy residential land before realising they didn’t qualify to do so. They were unable to complete the purchase. 

The purchaser wrongly believed they had a residence class visa when in fact they had a work to residence visa, which is a type of temporary entry class visa and is not a resident visa.  Without a residence class visa, the purchaser could not buy a home to live in.

Purchasers must complete a residential land statement stating that they comply or will comply with the requirement for consent. Solicitors need a statement to lodge the transfer instrument.

Our advice for purchasers is:

  • Talk to a lawyer and make the sale and purchase agreement conditional on Overseas Investment Act approval if there’s doubt about whether the Act applies.
  • Talk to a lawyer or immigration advisor if there’s doubt about whether a visa is a residence class visa or not.
  • Check what your visa status allows you to buy in New Zealand at New Zealand Now.
  • Check out the rules that apply for buying a home in New Zealand if you are not a New Zealand citizen.
  • Seek guidance from the Overseas Investment Office by calling 0800 665 463 or emailing.

First apartment transitional exemption certificate

The OIO signed off the first transitional exemption certificate for an Auckland development on 23 November.

Hengyi (10-12 Commerce) Limited Partnership received the certificate for its development in downtown Auckland.

A transitional exemption certificate allows overseas people to buy apartments off the plans. The developer can sell up to 100 percent of the units to overseas people, and those overseas people who buy do not need consent from the OIO. They can live in the apartments, and do not have to on-sell.

The certificate only applies to the first sale of the residential dwelling.  If the original overseas purchaser wants to on-sell to another overseas person, the second purchaser cannot rely on the certificate to be exempt from the need for consent.

Transitional exemption certificates are available for land that is residential (but not otherwise sensitive) land. The development must:

  • Be used, or be intended to be used, to build one or more multi-storey buildings, where each building consists of at least 20 residential units; or to increase the number of residential dwellings in one or more multi-storey buildings, where the number of residential dwellings in each building will increase by 20 or more.
  • Include at least 20 new residential apartments that were not complete as at 22 August 2018, but are likely to be completed by 22 August 2023.
  • Be subject to at least one pre-sale of one of the incomplete apartments on or before 22 August 2018.
  • The pre-sale must have been in good faith and in the ordinary course of business.

Applications for transitional exemption certificates can be made to the OIO up until 21 February 2019.

We will publish all certificates here.

Changing approach to overseas investment

We have experienced a lot of change during 2018, including changes to the way we assess applications.  

The Ministerial Directive Letter of 28 November 2017 directs us on the Government’s general policy approach to overseas investment and, in particular, investments in rural land.  This has had a noticeable effect on how applications to acquire rural land are assessed.

Over the last couple of years our assessment process has also become more robust and we are currently looking at ways it could be improved.

Applicants should take into account the Government’s general policy approach to overseas investment when considering whether to undertake an investment or what information to include in an application. Applicants should also ensure that applications contain the information requested in the application forms. 

Applications that use submissions similar to those used in previous applications may find the process challenging as the assessment is likely to take longer, involve further information requests or be unsuccessful.

OIO investigation into Agria

The OIO has investigated the good character of Agria Singapore and former PGG Wrightson chair  Alan Lai in relation to Agria’s shareholding in PGG Wrightson.

Both Agria and Mr Lai have co-operated with the OIO investigation, following the United States Securities and Exchange Commission’s investigation. 

The OIO, Agria and Mr Lai have reached a settlement agreement which required Agria to sell down below its 50.2 percent interest in PGG Wrightson (which it has now done in compliance with the agreement) and provided for penalty proceedings to be filed in the High Court. 

Monthly OIO updates

At the end of each month we publish on the LINZ website overseas investment decision summaries and update other information, including exemption certificates and some application details previously withheld. To receive monthly email updates about the new information, please sign up here.

Legal Q&As

Q: I’m from overseas and buying a house. My spouse is a New Zealand resident. Do I need consent?

A: No, you don’t need consent if your spouse or partner is a New Zealand citizen or ordinarily resident in New Zealand, so long as the house will be relationship property and you buy the house as a result of division of relationship property.

Q: If I’m planning to buy a house and I think I need consent to do this, can I apply before I put in an offer on a house?

A: Once you know you need consent from the Overseas Investment Office, apply for consent as early in the sale process as possible. You can apply for pre-approval before you find the property you want to buy using the forms here.

Holiday closure

We’re on holiday from noon on Monday 24 December and we’re back at our desks on Monday 7 January.

Media enquiries

Email: media@linz.govt.nz or phone: 027 566 5251