The Government will end foreign buying of existing houses by classifying them all as “sensitive” under the Overseas Investment Act, Prime Minister Jacinda Ardern says.
This “clean solution” would effectively ban foreign speculators without affecting the TPP or most free trade agreements, Ardern said.
Anyone who was not either a citizen or resident of New Zealand would not be allowed to purchase existing homes.
It’s not quite as simple as that, but if this allows Labour to do a u-turn and support TPP, I’m in favour. They also could have used stamp duty to achieve their goals. I don’t care too much what mechanism they use, if it means we don’t walk away from TPP. I suspect Jane Kelsey is furious though.
Foreigners would still be able to buy land and develop housing on it for on-sale. Australians would have a special carve-out to still be able to buy homes – as Kiwis do in Australia.
So it doesn’t affect some foreigners, and foreigners can still buy up land – they just can’t buy an existing house. A bit daft as land is what is in short supply.
So don’t think this will impact house prices. The best estimate is only 3% of sales were to foreign taxpayers.
National’s finance spokesman Steven Joyce said the amendment wasn’t actually a ban and raised many questions.
“The first and strangest thing about Labour’s announcement is that it isn’t an actual ban. Putting houses through a sensitive land purchase criteria is definitely bureaucratic but does not constitute a ban on such sales,” Joyce said.
The current criteria for sensitive land sales requires the buyer be a resident, citizen, or get a special ministerial signoff.
“There are also all sorts of definitional questions. Is an apartment on the fourth floor of a building ‘sensitive land’? Is a two hectare property with two houses on it that’s being sold for development able to be sold to an international investor?” Joyce said.
The devil is in the detail. As I said I don’t think it will achieve anything much, but if it allows Labour to do a u-turn on TPP that is well and good.