Further Changes to Overseas Investments - Rural Land
Further to our earlier article, Government Cracks Down On Foreign Property Buyers, the Government has now announced the strengthening of their policy approach to overseas investment in rural land through a new directive letter.
New Directive Letter
The new directive letter came into effect on 15 December 2017 and replaces the previous 2010 version. This new directive tightens how overseas investments are assessed to ensure authorised purchases of rural land provide a genuine benefit to New Zealand.
The strengthened test has five key criteria which will apply to new applications as well as existing applications.
Benefit to New Zealand – Key Criteria
- The creation of jobs;
- New technology or business skills;
- Increased export receipts;
- Increased processing of primary products;
- Oversight or participation by New Zealanders.
These requirements apply to all rural land, which is non-urban land greater than five hectares that is not used for forestry.
Forest land applications are to be treated differently. Overseas investment plays an important role in the forestry sector and is a significant source of employment in regional communities.
Intention to Reside in New Zealand
If an overseas person can show that they intend to reside in New Zealand indefinitely, then the benefit to New Zealand test may not apply. An overseas person would be expected to move to New Zealand within 12 months from the date of consent and become a resident within two years from the date of consent. This is a shift from the previous policy, which, as a general rule, only required an overseas person to be a resident in New Zealand within five years of the date of application.
The new directive letter is part of the Government’s steps to strengthen the overseas investment regime. Indications are that there will be further legislative and regulatory intervention. The team at Saunders Robinson Brown will keep you informed of the latest developments.
The above information is of a general nature only. You should contact our firm for advice relating to your specific circumstance.
About Chris Boivin
Chris is a Partner advising clients on a wide range of matters. He assists with both commercial, rural and residential property matters, as well as business transactions and asset planning.