This section contains information on how we assess the proportional nature of the benefit assessment when considering applications

The benefit to New Zealand test

The benefit to New Zealand test is set out in section 16A of the Overseas Investment Act 2005. If the relevant land is or includes non-urban land that, in area (either alone or together with any associated land) exceeds 5 hectares, this benefit needs to be, or must likely be, substantial and identifiable.

Overseas Investment Act 2005, s16A

Proportionate approach to application assessment

Whether the benefit to New Zealand is sufficient to meet the benefit test or the substantial and identifiable benefit test is assessed on a proportionate basis relative to the investment.

Section 3 of the Act acknowledges that it is a privilege for overseas persons to own or control sensitive New Zealand assets. It is a greater privilege for an overseas person to own or control high value sensitive New Zealand assets than lower value sensitive assets. We consider that the higher the value of the assets being acquired, the greater the privilege it is to own and control those assets, and the greater the level of benefit that is required to meet the benefit test.  This means, for example, more benefit is required to acquire a 1,000-hectare orchard than a 50-hectare orchard, all other factors being the same.

Some points we consider when determining the value of the sensitive New Zealand assets being acquired, include:

  • the size of the land
  • the monetary value of the land
  • the public interest in the land
  • whether the land includes or adjoins features such as a marine and coastal area or historic heritage
  • the number of sensitivity factors in the Act that apply
  • the infrastructure that is present on the land
  • the business being run on the land
  • whether the land contains any strategically important infrastructure
  • the degree of ownership or control of/over the interest in the land that is being acquired
  • the nature of the interest being acquired (temporary or permanent).

These considerations are not exhaustive, and no single factor is determinative. Each investment is assessed on its own merits and the specific facts that relate to it.

Last Updated: 5 July 2021