The Government has announced a targeted exemption to New Zealand’s foreign buyer ban. Holders of Active Investor Plus residency visas (and certain earlier investor visas) will soon be able to purchase or build one residential property valued at NZ$5 million or more.

Background

The Overseas Investment Act 2005 (Act) prohibits overseas persons from acquiring residential property without first obtaining consent from the Overseas Investment Office.  

In 2022, the Government introduced the Active Investor Plus (AIP) residency programme whereby individuals can obtain residence by investment. Earlier this year, the AIP programme was refined into two investment categories: 

• Growth – NZ$5 million investment.
• Balance – NZ$10 million investment.

Applicants can obtain residence by making the minimum investments and meeting minimum time-in-country requirements (see our previous article on this topic here).

Under the current foreign buyer settings, most AIP visa holders and other resident-class visa holders who do not spend at least 183 days in New Zealand within a 12-month period, would not be eligible to acquire a residential home in New Zealand.

The exemption

It is proposed that the foreign buyer ban will be amended to allow AIP residency visa holders to purchase or build one residential property, provided it is valued at NZ$5 million or more. The existing restrictions on sensitive land (including rural and farm land) will continue to apply.

The exemption will also extend to individuals who obtained residence under the former Investor 1 and Investor 2 visa categories.

This is not a wholesale reversal of the foreign buyer ban, but rather a narrow exemption designed to support New Zealand’s investment and economic growth strategy – aligning with the Government’s broader strategy to attract talented individuals and their capital to New Zealand.

Next steps

Dentons will continue to monitor the progress of this legislation. If you would like any advice or assistance in relation to the AIP programme, our experts Henry Brandts-Giesen, Wook Jin Lee, Joy Wang, Daniel McLaughlin and Sarah Wells have extensive experience in assisting overseas investors and are available to help.

This alert was written by Erin Choi-Brown, a Solicitor in our Corporate and Commercial Team.