20 June 2019
Kia ora koutou
It’s almost eight months since we started playing by the new overseas investment rules on 22 October.
Last month the Overseas Investment Office released the first six months of information about the new pathway for people who need permission to buy a home to live in. We approved 103 applications by overseas people entitled to buy homes to live in. We will release this information quarterly, in conjunction wherever possible with the house sale statistics from Stats NZ.
Since 22 October 2018, most overseas people have not been entitled to buy a home to live in. This includes people with temporary visas, such as student, work and tourist visas. However, overseas people with New Zealand residency can apply for consent to buy a home. Once the OIO has their application a decision is made within two working days.
There was a time lag with settlements of agreements entered into before the new rules started but far fewer overseas people are now buying homes; the information from Stats NZ confirms this.
I’m pleased to see that many people are checking first with the OIO if they’re able to buy a house before they actually buy. We have had more than 600 inquiries about this since the new rules started.
The OIO – and our parent agency, Land Information New Zealand – is committed to sharing as much as we possibly can with you all. As part of our drive for transparency, the OIO responded to 319 Official Information Act requests from January 2018 to May 2019. The majority of these requests were from lawyers seeking copies of an OIO decision and the application information assessed. We are continuing to look at efficient ways to provide as much information as we can to all those interested in the work of the OIO.
With some recent applications we’ve chosen to release documents and other information because we appreciate the high public interest in them and we want to ensure that debate is well-informed and accurate.
The Treasury is grateful for the submissions it received during the consultation for the phase two review of the Overseas Investment Act. It is currently analysing these and LINZ continues to work closely with Treasury on advice to Ministers about potential reforms.
Thank you to everyone who has shared views with me and my staff so far this year. I’d love to hear from you so please continue to send your emails to me.
Please watch out for the next edition of PeriOIOdical, which will include a brief year in review for the OIO.
Ngā mihi nui,
Group Manager, Overseas Investment Office
Land Information New Zealand
This issue covers:
- Fine line between city and country
- Makeover for application assessments
- Who can buy a home to live in?
- Beating a path to the OIO door
- Pre-application meetings
- Transitional exemption certificates close
- Pre-approvals to streamline housing development
- Talking about walking
- No time like the present
- And please don’t count your chickens
- Sign up for monthly decision summary updates
As our cities push into the countryside, it’s not always easy to define where urban land ends and non-urban land begins. Since consent is needed for overseas investments in non-urban land of five hectares or more, it’s important to know how the OIO understands the definitions.
This month we added to our website guidance about non-urban land, with several factors to consider when assessing if land is non-urban.
The OIO is moving to a new format for application assessments, which were previously referred to as recommendation reports or Ministerials.
The main change in the reports, which are now known as assessment reports, is that they set out more clearly an application’s strengths and weaknesses, comments from third parties such as the Walking Access Commission and Department of Conservation, and provide a provisional recommendation for the decision-maker, whether the Minister or OIO, to consider.
Other elements of the application process are unchanged. We are, however, actively looking at ways to improve the timeliness and quality of the application process.
The changes are designed to make assessment information more accessible and contribute to effective, efficient and informed decision-making. We hope the new format will also increase transparency about what the OIO has considered, which will assist in broadening understanding about the work of the OIO.
Since 22 October 2018 we have had a significant number of inquiries about whether people are eligible to buy or build one home to live in and/or require consent from the OIO. We have developed an information sheet that explains the application process along with common scenarios that we have encountered. We believe that this will help support decision-making and provide a better experience for home buyers.
Information sheet: Who can buy a home to live in?
The OIO has created an overview of the different pathways under the Overseas Investment Act. This follows a large number of interviews we carried out earlier this year when we learned that people are looking for more information about overseas investment rules and how the OIO operates.
We encourage applicants and advisors to meet with us before submitting an application so we have a clear understanding of each other.
There is no OIO fee for pre-application meetings, which are an opportunity for applicants to outline their investment proposal and get feedback about how to improve the quality of an application.
About pre-application meetings
In the week starting 3 June 2019, the OIO decided the final transitional exemption certificate applications. Transitional exemption certificates can be granted to eligible apartment developments, allowing developers to sell those apartments to overseas people.
The OIO received a high volume of these applications in the lead-up to the deadline of the pathway in late February. In total, 30 applications were approved.
All approved transitional exemption certificates are published on our website to provide visibility for potential purchasers about which apartment developments have an exemption certificate.
We recently approved the first residential-related standing consents under the increased housing pathway.
Fletcher Residential Ltd was approved in April to buy up to 200 hectares of residential (but not otherwise sensitive) freehold land in Auckland, Canterbury or Waikato. It can make up to 12 transactions by 1 May 2022, when the standing consent ends.
In June Metlifecare was granted a standing consent to buy up to 120 hectares of residential land for long-term accommodation – in this case retirement living – in several regions. The company is also able to make up to 12 transactions during the next three years.
Standing consents are a type of ‘pre-approval’ for large developers. They must notify the OIO each time they settle a transaction in relation to the standing consent.
Walking access is often a condition of consent for overseas investments.
The Ministry for Primary Industries is reviewing the Walking Access Act 2008 and is keen to hear views about what’s working well and what could be improved.
People can provide feedback by email or by using an online feedback form between 17 May and 2 July 2019.
We have noticed an increasing trend of applicants taking significant time to provide us with requested information and, at the end of our assessment process, the final statutory declarations.
We require statutory declarations before we can make a decision and, in some instances, we wait several months before these declarations are provided. This delays our ability to process applications in a timely manner.
Delays in receiving further information and statutory declarations can also lead to some of the information in applications and investment plans, which we rely on to undertake our assessments, becoming obsolete.
It’s important for applicants to ensure further information requests and statutory declarations are provided promptly or we may be required to lapse applications.
It might be tempting for applicants to announce an OIO decision once they receive a request for a statutory declaration since this stage is near the end of the application process. But it’s not the final hurdle and we ask that they wait for a decision before going public.
The OIO usually asks applicants to comment on conditions and draft consent wording before a decision is made. Sometimes this will happen when the decision is finely balanced, and where the decision may go either way.
Therefore, applicants cannot assume that consent will be granted simply because draft consent conditions have been shared with them or statutory declarations have been requested. Applicants should wait to receive a formal decision letter from the OIO before making any public statement about the outcome of an application, and before taking any steps to complete the transaction.
At the end of each month the OIO publishes decision summaries for applications decided in the preceding month.
Join our mailing list to receive monthly updates about new decision summaries and historic decision summaries that have been revised to include information previously withheld under the Official Information Act.
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