Overseas persons who are not resident in New Zealand are generally not able to buy existing houses or other pieces of residential land. Exemptions apply to certain large apartment developments off the plan. The definition of 'overseas person' covers persons who are neither New Zealand citizens nor ordinarily resident in New Zealand, entities that are incorporated overseas and/or more than 25% owned or controlled by an overseas person, and New Zealand invidivuals or entities investing on behalf of an overseas person. On 5 July 2021, the Overseas Investment Amendment Act 2021, entered into force. Among others, this new reform refined the scope of the national interest assessment by increasing the threshold for transactions caught by an overseas person from over 10% to over 25% ownership. Moreover, this amendment establishes ownership or control interest limits at 50%, 75%, and 100%, refining consent requirements for overseas investments in sensitive land.
"12 What are overseas investments in sensitive land
(1) An overseas investment in sensitive land is the acquisition by an overseas person, or an associate of an overseas person, of all or any of the following (a section 12 interest): [...]
(2) The ownership or control interest limits are as follows:
(a) if their existing ownership or control interest in A amounts to more than 25% but less than 50%, their ownership or control interest limit is 50%:
(b) if their existing ownership or control interest in A amounts to 50% or more but less than 75%, their ownership or control interest limit is 75%:
(c) if their existing ownership or control interest in A amounts to 75% or more, their ownership or control interest limit is 100%.
[...]
20A Transactions that are transactions of national interest
Transactions involving non-NZ government investors or SIB
(1) The following kinds of overseas investment transactions are transactions of national interest:
Investment by non-NZ government investors
(a) a transaction of a kind described in section 12(1)(a) or 13(1)(c) of this Act, or in section 57D(a) of the Fisheries Act 1996, where, as a result of the acquisition, the relevant estate or interest in land, property, or fishing quota is acquired by a non-NZ government investor:
(b) a transaction of a kind described in section 12(1)(b)(i) or (ii) or 13(1)(a) of this Act, or in section 57D(b) of the Fisheries Act 1996, where, as a result of the acquisition, a non-NZ government investor has more than 25% ownership or control interest in A: [...]" (Overseas Investment Act (2005 No 82); last amended on 24 November 2021; Sections 12 and 20A)
---------------------
"6 Interpretation
(1) In this Act, unless the context requires otherwise,—
acquisition includes obtaining ownership or coming into possession by any means [...]
residential (but not otherwise sensitive) land means land that—
(a) is or includes residential land; but
(b) is not otherwise sensitive under Part 1 of Schedule 1
residential dwelling—
(a) means a building or group of buildings, or part of a building or group of buildings, that is—
(i) used, or intended to be used, only or mainly for residential purposes; and
(ii) occupied, or intended to be occupied, exclusively as the home or residence of not more than 1 household; but
(b) does not include any dwelling—
(i) to the extent that it is, or is part of, a long-term accommodation facility or an excluded accommodation facility; or
(ii) within a class set out in regulations as a class of dwellings not to be treated as residential dwellings in this Act
residential land—
(a) means land that has a property category of residential or lifestyle in, or for the purpose of, the relevant district valuation roll (for example, the land’s first character category code is “R” or “L”); and
(b) includes a residential flat in a building owned by a flat-owning company (regardless of whether the building is on land within a property category referred to in paragraph (a)), and, for that purpose, references in this Act to interest include a licence to occupy that flat, where terms in this paragraph have a meaning corresponding to those in section 121A of the Land Transfer Act 1952 or section 122 of the Land Transfer Act 2017
[...]
7 Who are overseas persons
(1) The purpose of this definition is to provide that persons are overseas persons if they themselves are overseas persons (for example, not a New Zealand citizen or ordinarily resident in New Zealand or, for companies, incorporated overseas) or they are more than 25% owned or controlled by an overseas person or persons.
(2) In this Act, overseas person means—
(a) an individual who is neither a New Zealand citizen nor ordinarily resident in New Zealand; or
(b) a body corporate that is incorporated outside New Zealand or is a more than 25% subsidiary of a body corporate incorporated outside New Zealand; or
(c) a body corporate (A) if an overseas person or persons have—
(i) more than 25% of any class of A’s securities; or
(ii) the power to control the composition of more than 25% of A’s governing body; or
(iii) the right to exercise or control the exercise of more than 25% of the voting power at a meeting of A; or
(d) a partnership, unincorporated joint venture, or other unincorporated body of persons (other than a trust or unit trust) (A) if—
(i) more than 25% of A’s partners or members are overseas persons; or
(ii) an overseas person or persons have a beneficial interest in or entitlement to more than 25% of A’s profits or assets (including on A’s winding up); or
(iii) an overseas person or persons have the right to exercise or control the exercise of more than 25% of the voting power at a meeting of A; or
(e) a trust (A) if—
(i) more than 25% of A’s governing body are overseas persons; or
(ii) an overseas person or persons have a beneficial interest in or entitlement to more than 25% of A’s trust property; or
(iii) more than 25% of the persons having the right to amend or control the amendment of A’s trust deed are overseas persons; or
(iv) more than 25% of the persons having the right to control the composition of A’s governing body are overseas persons; or
(f) a unit trust (A) if—
(i) the manager or trustee, or both, are overseas persons; or
(ii) an overseas person or persons have a beneficial interest in or entitlement to more than 25% of A’s trust property.
[...]
10 Consent required for overseas investments in sensitive New Zealand assets
(1) A transaction requires consent under this Act if it will result in—
(a) an overseas investment in sensitive land (see section 12):
[...]
11 Consent must be obtained before overseas investment given effect
(1) Consent must be obtained for a transaction before the overseas investment is given effect under the transaction.
(2) The procedure for obtaining consent (including who must obtain consent) is set out in subpart 2.
12 What are overseas investments in sensitive land
An overseas investment in sensitive land is the acquisition by an overseas person, or an associate of an overseas person, of all or any of the following (a section 12 interest):
(a) an estate or interest in land if—
(i) the land that the estate or interest relates to is sensitive land under Part 1 of Schedule 1; and
(ii) the estate or interest acquired is a freehold estate or a lease, or any other estate or interest, for a term of 3 years or more (including rights of renewal, whether of the grantor or grantee), and is not an exempted interest; or
(b) rights or interests in securities of a person (A) if A owns or controls (directly or indirectly) an estate or interest in land described in paragraph (a) and, as a result of the acquisition,—
(i) the overseas person or the associate (either alone or together with its associates) has a more than 25% ownership or control interest in A; or
(ii) the overseas person or the associate (either alone or together with its associates) has an increase in an existing more than 25% ownership or control interest in A; or
(iii) A becomes an overseas person.
[...]
16 Criteria for consent for overseas investments in sensitive land
(1) The criteria for an overseas investment in sensitive land are all of the following:
Criteria regardless of type of relevant land
(a) the investor test is met (unless the overseas investment is exempt from this criterion under subsection (3)):
Criteria if relevant land is exclusively residential and not otherwise sensitive
(b) if the relevant land is residential (but not otherwise sensitive) land,—
(i) 1 or more of the following tests in Schedule 2 are met:
(A) the commitment to reside in New Zealand test:
(B) the increased housing test:
(C) the non-residential use test:
(D) the incidental residential use test; or
(ii) the benefit to New Zealand test is met: [...]
(d) if the relevant land is residential land but is not described in paragraph (b),—
(i) the commitment to reside in New Zealand test is met; or
(ii) the benefit to New Zealand test is met:
Criteria if some relevant land is residential and some or all is sensitive for some other reason
(e) if the relevant land is not described in paragraphs (b) to (d), the benefit to New Zealand test is met: [...]
(2) For the purposes of this section, the investor test is met if the relevant Ministers are satisfied that—
(a) the relevant overseas person has, or (if that person is not an individual) the individuals with control of the relevant overseas person collectively have, business experience and acumen relevant to that overseas investment; and
(b) the relevant overseas person has demonstrated financial commitment to the overseas investment; and
(c) the relevant overseas person is, or (if that person is not an individual) all the individuals with control of the relevant overseas person are, of good character; and
(d) the relevant overseas person is not, or (if that person is not an individual) each individual with control of the relevant overseas person is not, an individual of a kind referred to in section 15 or 16 of the Immigration Act 2009 (which sections list certain persons not eligible for visas or entry permission under that Act).
(3) Subsection (1)﻿(a) (the investor test) does not apply to an overseas investment in sensitive land if either of the following circumstances applies:
(a) Circumstance 1:
(i) the application for consent is under the commitment to reside in New Zealand test only; and
(ii) the relevant land is residential (but not otherwise sensitive) land:
(b) Circumstance 2:
(i) the application for consent is under the increased housing test only; and
(ii) the increased housing outcome under the test is to be met by a development described in clause 4(1) of Schedule 3 (large apartment developments); and
(iii) the estate or interest in land relates to 1 or more new residential dwellings in that development; and
(iv) the transaction is entered into before the construction of the dwelling is complete.
[...]
16A Benefit to New Zealand test
General test
(1) The benefit to New Zealand test is met if all of the following are met:
(a) the overseas investment will, or is likely to, benefit New Zealand (or any part of it or group of New Zealanders), as determined by the relevant Ministers under section 17; and [...]
(c) if the relevant land is or includes residential land, the relevant Ministers are satisfied that the conditions that the relevant Ministers will impose on the consent in accordance with section 16B will be, or are likely to be, met.
[...]
Schedule 1 - Sensitive land
Part 1 - What land is sensitive
Land is sensitive under this Act if—
(a) the land is or includes land of a type listed in table 1 and the area of that type of land exceeds the corresponding area threshold (either alone or together with any associated land of that type), if any; or
(b) the land (land A) adjoins land of a type listed in table 2 and the area of land A exceeds the corresponding area threshold (either alone or together with any associated land), if any.
[...]
Table 1
Land is sensitive if it is or includes this type of land / and that type exceeds this area threshold (if any)
residential land /  —
[...]
Schedule 2 - Sensitive land that is residential land
Part 3 - Increased housing, non-residential use, and incidental residential use tests
10 For what land are tests in this Part available
The 3 tests in this Part are only available if the relevant land is residential (but not otherwise sensitive) land.
11 How increased housing test is met
(1) The increased housing test is met if the relevant Ministers are satisfied that—
(a) 1 or more of the following outcomes (the increased housing outcomes) will, or are likely to, occur on the residential land:
(i) an increase in the number of residential dwellings constructed on the residential land (including an increase from 0):
(ii) construction of a long-term accommodation facility on the residential land, or an increase in the number of dwellings in a long-term accommodation facility that is on the residential land:
(iii) development works on the land to support the doing of things described in either or both of subparagraphs (i) and (ii); and
(b) the following outcomes (as defined in clause 17) will, or are likely to, occur:
(i) the on-sale outcome (unless exempt from this outcome under subclause (2)); and
(ii) the non-occupation outcome.
(2) Subclause (1)﻿(b)﻿(i) does not apply,—
(a) if the increased housing outcome is as described in subclause (1)﻿(a)﻿(ii) and the relevant Ministers are satisfied that the long-term accommodation facility will, or is likely to, operate from the residential land within a specified period, to the extent that the relevant Ministers are satisfied that the land will, or is likely to, be used for those operations; or
(b) if an exemption under clause 20 (exemption for large developments with shared equity, rent-to-buy, and rental arrangements) applies.
(3) The increased housing outcomes are measured by comparing the expected result of the overseas investment against the state of the residential land before the transaction takes effect.
(4) In this clause (and in clause 19), development works—
(a) includes the construction, alteration, demolition, or removal of a building or infrastructure; and
(b) includes siteworks (including earthworks) that are preparatory to, or associated with, the matters set out in paragraph (a); but
(c) does not include subdivision of land without other development works.
(5) See also clause 18 (which sets out certain conditions to be imposed on consents that rely on meeting this test).
[...]
17 What are on-sale outcome and non-occupation outcome
(1) This clause defines the on-sale outcome and the non-occupation outcome for the purposes of various conditions and related tests.
(2) The on-sale outcome is that, within a specified period, the relevant overseas person disposes of all relevant interests in the residential land.
(3) The non-occupation outcome is that, for so long as the relevant overseas person has a relevant interest in the residential land, none of the following occupy the land:
(a) the relevant overseas person (A):
(b) any overseas person (B) who has a more than 25% ownership or control interest in A:
(c) any overseas person (C) who occupies the land otherwise than on arm’s-length terms (for example, a relative who occupies rent-free), where arm’s-length terms means terms that—
(i) would be reasonable in the circumstances if the owner of the land (including their property agent) and C (including their associates) were connected or related only by the transaction in question, each acting independently, and each acting in its own best interests; or
(ii) are less favourable to C than the terms referred to in subparagraph (i):
(d) any overseas person who has a beneficial interest in, or beneficial entitlement to, the relevant interest in the residential land:
(e) if A is a trust, a person who may (directly or indirectly) benefit under the trust at the discretion of the trustees.
(4) However, subclause (3)﻿(c) to (e) do not apply to a person who is entitled to occupy the land under any consent or any exemption in this Act or the regulations (for example, a person who has consent on the basis of the commitment to reside in New Zealand test may be entitled to lease a new dwelling in respect of which the developer is subject to a non-occupation outcome under the increased housing test).
[...]
20 Exemption for large developments with shared equity, rent-to-buy, and rental arrangements
(1) The relevant Ministers may decide not to impose a condition requiring the on-sale outcome if—
(a) a person (OP) has applied for consent under either of the following:
(i) the increased housing test in respect of residential (but not otherwise sensitive) land:
(ii) the benefit to New Zealand test in respect of land that is or includes residential land; and
(b) the relevant Ministers are satisfied that the relevant land is intended to be used for the construction of 1 or more buildings that, taken together, will consist of 20 or more new residential dwellings (the large development).
(2) The exemption in subclause (1) applies if the relevant Ministers are satisfied that—
(a) all of the new residential dwellings in the large development will be dealt with under 1 or more of the following arrangements that are satisfactory to the relevant Ministers:
(i) OP will jointly own the new residential dwelling with an occupier (for example, an arrangement commonly referred to as a shared equity arrangement):
(ii) OP will divest ownership of the new residential dwelling to the occupier over a period of time (for example, an arrangement commonly referred to as a rent-to-buy arrangement):
(iii) OP will lease the new residential dwelling to an occupier:
(iv) OP will divest ownership of the new residential dwelling; and
(b) there is no reason to believe that the large development will not be dealt with according to those arrangements; and
(c) OP is in the business of providing new residential dwellings by 1 or more of those arrangements.
(3) The exemption is subject to the following conditions:
(a) all of the new residential dwellings in the large development are dealt with under 1 or more of the arrangements referred to in subclause (2)﻿(a); and
(b) OP meets the non-occupation outcome.
[...]
Schedule 3 - Exemptions from requirement for consent
4 Dwellings in large apartment developments that are purchased off plans
(1) This clause applies in respect of land that is being used, or intended to be used, for 1 (or more) of the following (a development):
(a) in the construction of 1 or more multi-storey buildings as 1 development, where each building consists, or will consist, of at least 20 residential dwellings; or
(b) to increase the number of residential dwellings in 1 or more multi-storey buildings, where the number of residential dwellings in each building will be increased by 20 or more.[...]" (Overseas Investment Act (2005 No 82); last amended on 1 December 2020; Sections 6, 7, 10, 11, 12, 16 and 16A; Schedule 1, Part 1; Schedule 2, Sections 10, 11, 17 and 20; Schedule 3, Section 4)
Overseas Investment Act (2005 No 82); last amended on 24 November 2021; Sections 12 and 20A
Overseas Investment Act (2005 No 82); last amended on 1 December 2020; Sections 6, 7, 10, 11, 12, 16 and 16A; Schedule 1, Part 1; Schedule 2, Sections 10, 11, 17 and 20; Schedule 3, Section 4
[<a href="https://www.legislation.govt.nz/act/public/2005/0082/latest/versions.aspx?av=True">Act</a>],[<a href="https://www.legislation.govt.nz/act/public/2005/0082/51.0/DLM356881.html">Act</a>]