Regulation for property purchase in New Zealand

New Zealand, with its stunning ever-changing landscape, has become a major ecotourist destination in the Asia-Pacific region.

Its natural beauty is one reason why many overseas people choose to make New Zealand their home. Also, the country provides excellent lifestyle and employment opportunities.

As in other countries, overseas people are required to obtain governmental consent before buying a home or property in New Zealand.

If you are planning on buying a second home in the country, the policy summary of the New Zealand government's Overseas Investment Commission (below) may provide you with valuable information.

- Consent is required under the 1995 Overseas Investment Regulations for an overseas buyer to acquire a "lifestyle property" in New Zealand where the land exceeds five hectares, or where the land exceeds 0.4 hectares and involves certain sensitive land of over 0.4 hectares (e.g. on islands, containing or next to reserves, historic or heritage areas, or lakes), or where the land exceeds 0.2 hectares and includes or adjoins the foreshore.

- There are no definitive characteristics constituting a lifestyle block - it is a general term and one that will be determined on a case-by-case basis. However, generally speaking, they are acquisitions that involve overseas buyers acquiring land larger in size than any ordinary residential allotment, where the principal use of the land is non-economic in the traditional farming sense, where the value is in excess of the value of comparable farmland, and where the overseas buyer intends to -- either permanently or occasionally -- live on the land. There are two kinds of purchases by overseas buyers of lifestyle blocks, either as a holiday home, or as a home for residency.

- In general terms, lifestyle applications will normally be viewed favorably, in terms of the national interest test (sections 14D or 14E of the Overseas Investment Act 1973), where the applicant: a. intends to undertake significant developments on the property and convert it from a lifestyle block into a viable investment property. Such developments (which need to be more than just the erection of a dwelling on the property) include development for forestry, tourist-related ventures, etc.; or b. (the applicant) has or is proposing to make other significant investments in New Zealand.

- If the above factors are not present, lifestyle applications will normally be viewed favorably only when the applicant has an intention to reside permanently in New Zealand

- In relation to homes for residency, this intention will normally be demonstrated by the applicant having been granted permanent residency status. With regard to holiday homes, this intention will usually require permanent residency status and an intention to eventually reside permanently in New Zealand.

- For both kinds of lifestyle blocks, if permanent residency status and an intention to reside in New Zealand are present, and that matter is the deciding factor in approving the application, then it will normally be a condition of the consent that the applicant resides permanently in New Zealand and ceases to be an overseas person within 12 months of the date of any consent being granted. If, after ceasing to be an overseas person, the applicant subsequently returns to being an overseas person, the applicant must dispose of the property within such a period as stipulated by the commission of resuming his/her status as an overseas person.

- Overseas buyers wishing to purchase lifestyle blocks who are unlikely to satisfy the national interest test above, are advised that they may still purchase land for lifestyle purposes if the land is less than five hectares in area and it does not include nor adjoin sensitive land (e.g. an island, the foreshore or lake, or reserve etc. over 0.4 hectares in area). -- The Jakarta Post