Foreign buyers ban bill hits Parliament

It’s full steam ahead for the government’s plans to ban foreign buyers from buying existing dwellings with legislation set to be introduced into Parliament today.

Thursday, December 14th 2017, 9:00AM

by Miriam Bell

Housing and Urban Development Minister Phil Twyford

Housing and Urban Development Minister Phil Twyford says the legislation demonstrates the government’s determination to make it easier for New Zealanders to buy their first home.

The government welcomes foreign investment which adds to the country’s housing supply, but purchases of existing homes by offshore speculators push first home-buyers and families out of the housing market, he says.

“This government prioritises home ownership and housing affordability for all New Zealanders and this Bill will ensure that house prices are set by New Zealand-based buyers, not international buyers.”

Land Information Minister Eugenie Sage says the legislation brings residential land within the category of sensitive land in the Overseas Investment Act.

“It will mean, for practical purposes, that foreign buyers will not be able to buy residential property unless they are either increasing the number of residences and then selling them or converting the land to another use.

“They will need to be able to show that this will have wider benefits to the country.”

New Zealand and Australian citizens will be exempt from the ban.

Controversy has surrounded the spectre of foreign buyers and their impact on the housing market for several years.

Public opinion has it that foreign buyers are one of the major reasons for soaring house prices and limited supply.

In the Property Institute’s regular poll of views on the housing market foreign buyers are consistently cited as the biggest influence on house price inflation.

But a REINZ survey of 173 real estate agents, which was released earlier this week, revealed that currently only a minority of buyers (3.8%) are from overseas.

Land Information New Zealand (LINZ) data on the tax residency of participants in property transfers has consistently put the percentage of people with overseas tax residency at around 3%.

The government’s new Bill will go to Select Committee for consultation but Twyford says he expects the law to be passed early next year.

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