In what the Government says will "encourage deeper connection to New Zealand", people on Active Investor Plus visas will soon be able to buy or build a home worth at least $5 million - in addition to their $5 million or $10 million investment.
This is something that has been in the works for a while. In September, the Coalition Government agreed that "overseas-based investors" with a special investor residence visa would be exempt from the foreign buyer ban.
This ban was passed into law by the Labour–NZ First Government in 2018. Amendments to the Overseas Investment Act that year reclassified most residential land as sensitive, effectively banning foreign buyers from purchasing existing homes.
Many high-net worth investors have previously been put off by not being able to buy a home until they have lived in New Zealand for the majority of an entire year. The luxury rental market is growing but remains small, as most high-net worth people prefer to buy.
In September, Prime Minister Christopher Luxon said this ban would remain in place but further amendments to the Act would allow migrants on an Active Investor Plus residency visa to immediately buy a home.
Reforms to the Overseas Investment Act, including this housing change, kick in from March 6.
The 'golden' visa
The Active Investor Plus visa settings were changed in April, and two categories - Growth and Balanced - were introduced. The Government describes the visa as the 'golden' visa.
For the Growth category, people are required to invest $5 million over a three-year-investment term and in the Balanced category, a minimum of $10 million is needed over a five-year investment term.
The Growth category is focused on higher-risk investments, which includes managed funds and direct investments in the country's businesses. The Balanced category looks at mixed investments, which means people can choose investments that are lower risk.
People who successfully apply for the Active Investor Plus visa can live, work and study in New Zealand indefinitely.
Applications for the Active Investor Plus visa can include a person's partner and children. People in the Growth category can apply for permanent residence after three years of keeping funds in New Zealand and those in the Balanced category can apply after five years.
$1.05 billion invested
There have been 573 applications for 1833 applicants, for the Active Investor Plus visa - 105 in the Balanced category and 468 in the Growth category.
Immigration NZ's website said of the 573 applications received, 50 are from applicants transitioning an existing application to new settings. 523 are new applications.
Immigration NZ said $1.05 billion was the total committed investment from approved applications.
Of the applications received, this could amount to a potential total minimum investment of $3.39 billion.
Immigration NZ said 430 applications have been approved in principle - 72 in the Balanced category and 358 in the Growth category. There has been six withdrawal requests.
Immigration said 143 applications are still being assessed.
As of February, 182 applications have been approved and applicants have been granted resident visas - 39 in the Balanced category and 143 in the Growth category.
"The majority of the investments to date have been into Invest New Zealand approved managed funds, and bonds, Immigration NZ said.
The highest number of applications by nationality has been received from the United States. This was followed by China and Hong Kong. Other applications by nationality include Germany, Netherlands, Japan and Great Britain.
On Friday, Immigration Minister Erica Stanford said these results show the changes made by Government to the visa are achieving the goal of making an investor visa available that attracts "high-value global investors and supports the Government's Going for Growth approach."
“International investment is critical for lifting productivity, supporting jobs, and helping New Zealand businesses to expand. The results we are seeing indicate strong overseas confidence in our direction and economic ambition.”
Stanford said these investments were supporting sectors such as tech, healthcare, aged care, horticulture and digital media.
Housing
In September, opposition parties criticised the tweaking of the Overseas Investment Act rules.
Labour leader Chris Hipkins said Winston Peters and New Zealand First had betrayed their voters by allowing Luxon to pump up house prices with foreign money.
“He’s rolling out the red carpet for wealthy foreigners wanting to buy New Zealand while Kiwis struggle to get on the housing ladder,” Hipkins told reporters at the time.
Hipkins said the advice Labour had received while in government was that you couldn’t disconnect luxury house prices from the rest of the market. Price pressure at the high end would cascade down through to cheaper homes.
At the time, Green Party housing spokesperson Tamatha Paul said real estate agents would now have an incentive to boost prices to $5 million to sell to this new wealthy market wherever possible.
In a press release at the time, Paul said Luxon, who expressed in August that he wanted to see "modest" and consistent" house price increases, was working to make that happen "despite many crying out for the ability to access home ownership and all of the benefits that come with it."
Minor tweak
In September Peters told RNZ it was a "very, very, very minor tweak."
"We just couldn't get this country to be attractive enough, and we had to do something about that."
Peters said people on special investor visas would be limited to just one house which would minimise any impact on prices for locals.
"We're talking about the very, very top end of the market," Peters told RNZ.
"The greater problem we've got for home access is at the lower and middle end of the market."
7 Comments
Good
I worry about the damage to social cohesion from importing this sort of wealth inequality. It's one thing to bring in skilled workers who earn a high salary as they go. It's another to bring in people who will command significant financial power without so much as lifting a finger in NZ, let alone having any understanding of our social values - foremost among them egalitarianism and the universal respect and decency that is sadly lacking in much of the world. Seems like a shortcut to more division, all for a tiny trickledown payoff?
It's really hard after all these years to still watch our rulers and see their unwavering belief in the failed trickledown theory.
Queenie being a good example of that. Some Aotearoan-owned businesses doing OK out of trickle-down there, but the spin-offs limited for the serfs.
They're just importing well healed future political donors.
It would be a mistake to assume the average Kiwi should get anything out of these deals.
Trump has made it pretty clear that it's an open season for political bribes, and Luxon is just into sharing the love.
Important to remember that foreign ownership of listed bank stocks in Aussie / Aotearoa is high, but the proportion is not officially published. Best evidence suggests foreign investors likely own a majority of the equity of the major banks in both countries, with Australia’s big banks typically in the 60–80% foreign‑owned range.
The foreigners have been pulling their weight.
https://australiainstitute.org.au/wp-content/uploads/2022/06/P1226-Fore…
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