Forced sales and $20k fines in new offshore house ban law

Property

Any buyers breaching the Government's new offshore buying ban on New Zealand houses may be forced to sell the houses

14th Dec 17, 4:52pm by David Hargreaves

By David Hargreaves

The Government's proposed new law banning offshore-based people from buying New Zealand residential property was introduced into Parliament on Thursday and it contains provisions to force sale of properties, along with up to $20,000 fines in some circumstances.

While Housing and Urban Development Minister Phil Twyford and Land Information Minister Eugenie Sage spoke to introduction of the legislation earlier in the week, the Overseas Investment Amendment Bill as it is styled was introduced by Attorney-General, Trade, Economic Development and Environment Minister David Parker.

The preamble to the Bill states that it will ensure that overseas persons who are not resident in New Zealand "will generally not be able to buy existing houses or other pieces of residential land".

"This will lead to a housing market with prices shaped by New Zealand-based buyers.

"The Bill will therefore make homes more affordable for New Zealand buyers at some times in the property market cycle, including for first home buyers, while also supporting our efforts to build a more productive economy, by helping redirect capital to productive uses."

The Bill provides that overseas persons would be able to buy residential land in certain situations. These are:

• if they will be developing the land and adding to New Zealand’s housing supply; or

• if they will convert the land to another use and are able to demonstrate this would have wider benefits to the country; or

• if they hold an appropriate visa and can show they have committed to reside in New Zealand.

"The Bill requires that conditions be imposed if an overseas person purchases residential land utilising one of these exemptions, for example, if an overseas person purchases residential land to build houses on it, they will be required to sell the land when the houses are built," the Bill's preamble states.

In terms of the enforcement powers given to the Overseas Investment Office in relation to the new legislation, the Bill states that the 'regulator' may issue a property buyer with notice to dispose of the property if the regulator has reasonable grounds to believe that the buyer has:

(a) contravened this Act; or
(b) committed an offence under this Act; or
(c) failed to comply with a condition of a consent or of an exemption.

The Bill says the notice period for sale given by the OIO must "not be less than 90 days after the date on which the notice is given".

This would suggest therefore that a three-month notice period would probably be standard.

The Bill goes on to say that if the buyer does not dispose of the property within the time and in the manner specified in the notice, "the regulator may take any other enforcement action it thinks fit in relation to the contravention, offence, or failure".

Another very interesting section in the bill refers to the issuing of certificates showing that the buyers are entitled to buy a property.

The Bill states that the provider of conveyancing services must give the certificate.

"Before the transaction to acquire the interest is given effect, the provider must, in the prescribed manner (if any), certify that, to the best of the provider’s knowledge, A [the buyer] will not contravene or commit an offence under this Act by giving effect to the transaction."

It goes on to say that the "provider" must keep a copy of the certificate for a period of at least seven years after the date on which the transaction is given effect.

"Every person who, without reasonable excuse, fails to comply with this section commits an offence and is liable on conviction to a fine not exceeding $20,000," the Bill says.

The Bill will be sent to Select Committee so that public submissions can be heard, but the Government's hoping to have it passed into law early in the New Year.

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90 Comments

by TainuiBabe | 14th Dec 17, 5:30pm 1513225852

The silence is deafening.

by NorthernLights | 15th Dec 17, 9:03am 1513281780

So an overseas buyer can buy land and build houses if he/she/entity sells them ?
Sounds like what’s been happening under National!
Or are the new government also going to specify the price the new homes can be sold for ?
NZ$ dropped today already

by bw | 15th Dec 17, 9:08am 1513282138

Under National/previous Labour/All of them, existing houses could be bought and sold. Now, a new building must go up, increase supply, if a foreign national wants to invest in New Zealand. Note that once a foreign national has built a house, they can't then sell it to another foreign national. It 'exists' so joins the pool of property available exclusively to New Zealand nationals.

And as far as '" foreign capital will say bye-bye" goes? The asset has to be sold first to do that - who to? Answer: Only to a New Zealand national - and what price will/can they pay?

by NorthernLights | 15th Dec 17, 11:27am 1513290445

BW
The point is the price point the house will be sold for will be set by ? The foreign national building the house
Unless the silly govt is going to legislate pricing as well

by NorthernLights | 15th Dec 17, 12:34pm 1513294450

You have to laugh !
After all the up beat spruiking talk from the main spruikers here not one has said a word about this ridiculous proposed legislation !

by kiwimm | 15th Dec 17, 1:02pm 1513296160

National party weren't expecting this so it is taking a while for the party line to be decided and disseminated

by Nzdan | 14th Dec 17, 5:59pm 1513227589

Wow so they can build houses but must sell once the houses are built.

In before the sound of “but they will work out ways to get around the law”. Yeah probably but forced sale/confiscation and a fine worth the risk? Every person who fails to comply (emphasis on every person) is liable on conviction to a fine not exceeding $20k. I guess that includes the real estate agent, conveyancer and could even drag in the vendor if they knew about it.

by NorthernLights | 15th Dec 17, 8:49am 1513280956

Sounds to me like the new government haven’t thought this out very well at all
This is draconian
My sympathies to existing home owners This will start the depression in values

NZer Chris Liddell [ ex GM CFO ] on Trumps Strategic Intiatives Committee just appeared at WH news conference with Trump
as he CUTS REDTAPE !
The new kiwi govt increases redtape
If they wish to put in place new legislation they should retire some of the old legislation on the books
NZ has too many regulations and nobody ever does anything to fix that impediment

by kiwimm | 15th Dec 17, 1:12pm 1513296726

What about this regulation is bad for NZ-based NZers in the long-run and what would the alternative look like?

by Averageman | 14th Dec 17, 6:32pm 1513229548

Residents not living in NZ can get binned as well. Awesome. Chose China or NZ....

by Kate | 14th Dec 17, 6:59pm 1513231181

But can they (i.e., offshore, non-resident buyers) buy a new house off plan? And can they buy apartments or leasehold condos, such as those in a retirement village?

by NorthernLights | 15th Dec 17, 8:52am 1513281141

Why would they now ?
It’s looking more like Communist regulation

by BearBear | 14th Dec 17, 7:51pm 1513234288

Wow! A good start particularly with the force sell part. However I think adding a carrot and stick approach will supplement this bill further. That is should any lawyers, accountants, RE agent or bank staff found trying to cheat/bypass the intent of this bill will lose their license to practice their trade in nz forever!!! As well as a 20k incentive for the person who directly ratted out the scumbags within their trade.

by Solidname | 14th Dec 17, 7:59pm 1513234756

I like that, they should also be encouraging a shop your boss for those scumbags who are exploiting immigrant labour - option a) you get found out and you're deported with a criminal record, or option b) you shop the owner get a $20k reward and a ticket back home with a clean slate. The owner goes to jail, and a commensurate fine, the minimum $50k they've allegedly been paying per employee per annum would suit.

by BearBear | 14th Dec 17, 8:20pm 1513236037

So true!!! Never thought you can apply this same principle to employment too ;D. Who knows PTE centers as well? Rat your own dodgy school out, school pays heavy fine and lose license, a portion of money goes back to the snitch and other affected students without being blacklist by immigration.

by BearBear | 14th Dec 17, 8:04pm 1513235057

After all RE agents need to eat too after they find themselves selling less properties for less $. Getting some money in the short term while eliminating rivals within their trade. A win win for them and the public XDDDD

by Didge | 16th Dec 17, 9:04am 1513368280

Are real estate agents of any importance to our economy? Do we have too many of them?

by two otherguys | 15th Dec 17, 8:58am 1513281502

Reward for Whistleblowers

by Penguin | 14th Dec 17, 8:21pm 1513236102

It’s headline stuff imo. I don’t think it will actually have any Impact.

Good intentions though.

by Nzdan | 15th Dec 17, 6:15am 1513271708

Well no you’re always going to have people flout the law which is why you read about people getting done for fraud, murder etc. It’ll have an effect in the sense that people will ask “what if I get caught?” and I’m sure a good proportion of people will decide not to.

I’m sure agents and solicitors don’t want to risk getting stung either.

by CJ099 | 15th Dec 17, 7:25am 1513275945

Good to see that they are taking some good tough measures on this, they'll need it if the Vancouver Tax dodging is anything to go by as to how systems can be gamed.

Better Dwelling article: Dodging Canadian Foreign Buyer Taxes: A Guide To Exploiting Loopholes For Fun and Profit

https://betterdwelling.com/dodging-canadian-foreign-buyer-taxes-guide-e…

by Eco Bird | 14th Dec 17, 9:27pm 1513240078

My Goodness !! ...talk about complicated and tangled laws ... who is going to administer and police this, and How ???
And at what cost to the taxpayer ?? ... Forcing to sell ? Seriously? ....someone said today we have not reached Venezuela yet , well I am sure we are not too far away ....

and all this is for what? ... 3% of sales?? REINZ said it was 3.8% ( they think, as the data is not complete!!)

Almost all properties these foreigners buy are out of the dreams of FHBs anyway !! they buy the $1M+ , new 4-5 bdrm houses ...not old crappy 1960s bungalows !! or buy land and develop, and that is allowed in the new law, so where is the actual gain???
Another law based on "Intentions" ?? what a joke !!

I would only describe this as a dog's breakfast ... A bill with very little substance or merit .... nothing but another morphine shot to calm their envious mates and the brainwashed people who follow MSM media stories and who are completely confused between foreign residents and non residents.

But hey, Well done !!... we can all now sleep tight knowing that the residential properties will now become more affordable after shutting off those horrible overseas manipulators robbing our houses off with their cheap money ...!! How dare they ??

Keep an eye on prices folks ... you might miss out on an "affordable" if you blink ...!

by swapacrate | 14th Dec 17, 9:30pm 1513240240

Well all I can say Eco Bird if you dont like it then Im all for it. It must be hitting property where it needs to.

Well done Labour.

Lets watch the House prices come down, where is John Wheeler.

by Solidname | 14th Dec 17, 9:36pm 1513240612

Seconded.

Eco - 3% or 3.8% overseas buyers, overseas buyers don't buy older properties - do you seriously believe the stuff that you write?

by Eco Bird | 14th Dec 17, 9:37pm 1513240665

haha, calling for help are we ?? ...

Wheeler is working hard on how to prove that Auckland prices lost $200K after REINZ figure yesterday !!

I agree with Penguin, this is headline and feel good stuff , they had to do it as it was an election promise ... but, in its current form, has no substance and will have no effect what so ever.

by swapacrate | 14th Dec 17, 9:53pm 1513241606

No I just find him funny.

by BearBear | 14th Dec 17, 9:35pm 1513240551

Triggered?? XD.

by TainuiBabe | 14th Dec 17, 10:16pm 1513242999

It is becoming apparent that only FHB's are watching the property market. Everyone else is looking to other investments that are more liquid and can be easily bought in small parcels over a period of time. Property is done for now. Too many government requirements needed such as insulation, smoke alarms, rising insurance risks, meth contamination testing... No thanks. Shares at least provide regular dividends and require no ongoing maintenance, insurance and rising rate increases. I am done with property investments for now!

by Eco Bird | 14th Dec 17, 11:56pm 1513248982

You are 100% correct about other investment choices.

by JRSNZ | 15th Dec 17, 7:06am 1513274768

Agreed. FHBs are now back in the market but it is a lonely place. Everyone with even a few years of experience in the market won't go near it. I fear for their financial futures.

by CJ099 | 15th Dec 17, 7:44am 1513277082

We all know that National voters like yourself don't want to see the property ponzi scheme to go down but, you know you have to face the harsh realities of life Eco Bird. Think about it, if house prices had continued to skyrocket at the rate they were going; no legitimate business would be able to function in Auckland and your average citizen wouldn't be able to afford to live here because it has becoming simply far too expensive.

And do you know that each year about $1.35 billion from the proceeds of fraud and illegal drugs is laundered through everyday New Zealand businesses, a lot of that comes from abroad and is channeled in to Auckland property, that is then land banked to be flipped at a huge profit later (Music to your ears isn't Eco Birdy).

At least now we can move away from that false economy.

https://www.justice.govt.nz/justice-sector-policy/key-initiatives/aml-c…

by NorthernLights | 15th Dec 17, 8:53am 1513281221

Eco Bird
What a knowledgeable bird you are indeed
You’re right this is half baked legislation

by TainuiBabe | 14th Dec 17, 10:07pm 1513242474

This new government policy has already hit headlines across other western countries such as Canada, as they watch and wait to see if our new policy hits where it hurts the speculators the most. Australians have been calling for it for a couple of years and NZ gets in first. That must hurt!

by NorthernLights | 15th Dec 17, 8:55am 1513281302

Only people it will hurt are those living in NZ
Foreign capital will say bye bye

by TainuiBabe | 16th Dec 17, 12:27am 1513337255

That is exactly the point! Goodbye to foreign capital investing in non-productive housing stock.

by two otherguys | 15th Dec 17, 9:18am 1513282692

NZ gets in First? - What are you talking about?

Australian has had this ban in place for years - where-ya-bin

by CWBW | 15th Dec 17, 12:47am 1513252051

It won't work. Just use a trust or set up a shell company- problem solved!

Proxy buying, anyone?

by Nzdan | 15th Dec 17, 6:23am 1513272220

Is it that simple? Now you have to effectively provide evidence that you’re entitled to purchase the property so I’d imagine people will be digging deeper into properties to be sold to companies or trusts. From the article:

Another very interesting section in the bill refers to the issuing of certificates showing that the buyers are entitled to buy a property.

The Bill states that the provider of conveyancing services must give the certificate.

by NorthernLights | 15th Dec 17, 8:56am 1513281413

Can’t wait to see overseas reaction IF they start confiscation of foreign buyers properties
Talk about a backwater it’ll turn into a dried up swamp

by Averageman | 15th Dec 17, 9:48am 1513284533

So we need more foreign cash like another runway and casinos (and associated drugs and laundering), highrise brothels and crappy campers leaving turds everywhere? I think not.

Medium term we need to get this type of legislation down pat before hyper sonic passanger have us a couple of hours from China and the US.

by NorthernLights | 15th Dec 17, 11:34am 1513290860

Average
Wasn’t it a couple of bros in Wellington who are NZs biggest brothel owners ?
They owned a Auckland building that mysteriously burnt out
NZ doesn’t need foreigners to run criminal enterprises there’s a number of leading crime organizations
Don’t forget the Hells Angels NZ branch was the first overseas chapter outside the United States
NZ holds a special place in the Angels USA heart

by TainuiBabe | 16th Dec 17, 12:36am 1513337814

You are referring to the Cho Brothers. TV3 have done a couple of documentaries on our lovely new imported brothers in arms. Yes they ran their main business in the vicinity of my town in K-Road and yes they were very successful at running all sorts of sidelined businesses in conjunction with their main interests. Do I need to spell it out for you?

by B-Rocker | 15th Dec 17, 12:55pm 1513295743

Northern Lights, you sound like you have the total opposite opinion to Eco Bird. He says this will make no difference whatsoever, and you say that it will work too well.
It will be interesting to see who is right.

by TainuiBabe | 16th Dec 17, 12:30am 1513337415

We are already living in a dried up swamp. Haven't had decent rain for the past 6-8 weeks and we are now facing severe water shortages! I'm breaking the law by watering my vege garden FFKS!

by JRSNZ | 15th Dec 17, 7:09am 1513274973

This is looking more and more unlikely. With FATCA rules and AML/CFT reporting being imposed on lawyers in July 2018 that require lawyers to identify beneficial owners of entities, I struggle to reconcile how that, along with the certification required by this Bill, can allow someone from overseas to purchase without being found out.

by sharetrader | 15th Dec 17, 7:51am 1513277515

there will be a loophole left, buyers from Singapore, how long before someone sets up an investment vehicle in Singapore for Chinese buyers to invest into.
hopefully they can close that loophole

by JRSNZ | 15th Dec 17, 9:23am 1513283026

I agree. There will be loopholes, but the more difficult it is the better for all.

by Boss Hogg | 15th Dec 17, 6:40am 1513273207

Finally a government with some sense. While I benefited greatly from the National open door policy (not just in housing but the business I am in) the door had to be adjusted.

I would suggest house prices will continue downward (irrespective of what REINZ and other conflict of interest parties say) I am at the coal face of development and there has been a significant change in sentiment in the market.

by NorthernLights | 15th Dec 17, 8:58am 1513281538

Someone calling themselves Boss Hog agreeing with this lunacy says it all
Watch out there will be repercussions IF this becomes legislation

by j3y | 15th Dec 17, 6:40am 1513273255

This at least has some legs, plus they can observe how it affects the market and the fine can be adjusted to suit in the future if needed. Having the policy there is better than nothing.

by two otherguys | 15th Dec 17, 8:12am 1513278729

You have to like the woolly make-believe language

"may be forced to sell the houses" - not will be - just maybe - who will make that decision - who will be the policeman

"provisions to force sale of properties, along with up to $20,000 fines in some circumstances" - don't you like that "in some circumstances" - that is code for "sometimes never"

"will generally not be able to buy existing houses or other pieces of residential land" - like the generally - no definite about it

by Didge | 15th Dec 17, 9:07am 1513282077

With the best of intentions NOTHING is set in concrete when dealing with law.

by mvgsmf | 15th Dec 17, 8:36am 1513280217

Ex-long time National voter and I'm stoked.

This is the singular issue I voted for this time.

After 9 years of inaction and being told "its impossible" it has been done in a matter of weeks by the mob I least expected to get it done.

It may not be perfect or 100% watertight for those truly motivated to beat it (nothing is ) but it is a message - we are not your plaything anymore - go find an easier target to speculate with.

by NorthernLights | 15th Dec 17, 9:01am 1513281666

Mvgsm
You’ll get to enjoy after 9 yrs of waiting a decline in your property value
This is extreme lunacy

by Didge | 15th Dec 17, 9:14am 1513282473

@ NL. Negative rubbish.

by CJ099 | 15th Dec 17, 9:27am 1513283239

Where is it you're living these days NL?

by NorthernLights | 15th Dec 17, 11:40am 1513291244

If you don’t know by now CJ
You’re all extremely naive if you believe this will help NZ
This is a complete over reaction
It’s the extreme opposite of the JK foreign speculators repatriation of capital gains paying no tax regime
You’re so miopic you have 0 global perspectives

by CJ099 | 15th Dec 17, 12:11pm 1513293081

No need to get abusive Northern. You don't even live here from what I recall from your previous comments, I presume that you are worried that you won't be able to buy whilst you're living else where in the world or that you might be forced to sell any existing property you own in NZ?

And are you saying that bringing down the cost of living is not going to help NZ? Have you not heard of a global economy, which is very competitive by the way?

Really NL, what planet are you on?

by NorthernLights | 15th Dec 17, 12:25pm 1513293931

CJ
I think you need to tone down your rhetoric
I’m pointing out my opinion only
The fact is NZ does need foreign capital and it’s better it comes from foreigners investing in NZ than the government borrowing overseas funds to prop up the economy
Why do you think JK kept the doors wide open to new migrants ?
The point has always been there was not enough regulation
This proposed legislation is overkill
To those commenting “It like Australia’s “ they neglect the simple fact Australia is eminently more attractive for foreign investment and they can afford to be tougher with foreigners investing in their economy.
NZ is 1/5th the pop a couple of little islands at the end of the world
It can not afford to upset foreign investors

You’re welcome

by Groen_mamba | 15th Dec 17, 1:07pm 1513296432

And the doubling of house prices is not overkill?

by CJ099 | 17th Dec 17, 9:04am 1513454672

Seriously Northern, I think you're the one being naive. That so called non resident investment, isn't really an 'investment' it's just money laundering, see things for how they really are.

That's the type of so called investment, is the type that we really do not need. So, no I do not see this new policy as over kill, in fact what we really need is this to support it: "Unexplained Wealth Order" to investigate suspected money launders, this bill was passed in the UK back in April this year and apparently both Australia and Ireland have it too.

Link: https://www.transparency.org/news/feature/unexplained_wealth_orders_how…

Funny that you should bring up JK, I'd love to know who was able to purchase his home sold recently for $20 million???

Since you don't seem to understand how money laundering works here's a nice info graphic for you, follow the money: https://www.ukunmaskthecorrupt.org/

Plus I remember when NZ had affordable housing in Auckland which wasn't that long ago, and they was no homeless people on the streets or families living in cars.

Besides all that, what do you care about NZ, you don't even live here!

by TainuiBabe | 16th Dec 17, 12:49am 1513338554

New Zealand was never going to thrive in the "Global Market"! It is only now, that most people are realising that their low incomes can't compete with foreigners buying up all of our houses. New Zealand is closing it's borders down and looking after it's own for now. We are doing a bit of a "Trump" deal, if you like to see it that way. Just a temporary breather. It is what it is, and most New Zealanders are happy with the change.

by mvgsmf | 15th Dec 17, 9:57am 1513285074

LOL - I'm pretty sure my house will still be there even if property values drop.....its shelter.

Not an ATM to speculate with... or buy a euro car on tick....or a boat or a business class overseas holiday on...

by Didge | 15th Dec 17, 10:00am 1513285250

Exactly mvgsmf.

by NorthernLights | 15th Dec 17, 11:42am 1513291361

Mvgdrs
ATM ? Who uses cash these days ?

by TainuiBabe | 16th Dec 17, 12:57am 1513339032

I use Cash, Debit Cards and occasionally a Credit Card which I pay off in full each month. I prefer to use savings for renovations rather than handing over my house to the bank. Loving life without any debt! And no I am not retired. Nowhere near it!

by Kate | 15th Dec 17, 11:57am 1513292274

You’ll get to enjoy after 9 yrs of waiting a decline in your property value

NorthernLights - all boats, no matter what their value, rise and fall on the same tide.

The lunacy is in the skipper who tries to sail out of the harbour on the low tide.

by NorthernLights | 15th Dec 17, 12:29pm 1513294192

Poetry Kate ?
Surely there’s another place for it perhaps
I’m disappointed
I’m happy I don’t own any NZ property right now so I have to say my boat sailed long ago !

by Kate | 15th Dec 17, 12:37pm 1513294661

Well that's great! Perhaps if you want to sail back, you'll find a much better place where people and families can flourish.

by two otherguys | 15th Dec 17, 8:58am 1513281522

Rubber Truncheon

by bilbo | 15th Dec 17, 9:14am 1513282459

A lot of Chinese are already rooted in here. I suspect a lot will be buying via friends and family. I would rather a see a full teath tax that killed the property cow for all investors. For instance a 1% land tax, balanced out with drop in income taxes.

by Retired-Poppy | 15th Dec 17, 12:49pm 1513295359

bilbo, Chinese are not going to rush to buy NZ property through back doors or whatever - it's now a falling knife. If anything, as this weakness morphs into a rout, they will begin to panic. The authorities will be deemed to have failed to protect Chinese wealth. The irony of it all is the looming possibility it could all go into a freefall as result of a debt crisis in Homeland China!

A couple of years ago I asked a property loving neighbour (Chinese) "are you prepared in the event of this all crashing?" His reply I thought was priceless "A crash will never happen, the authorities won't let it happen"

Ahhhhh - such bliss.

by Kate | 15th Dec 17, 12:05pm 1513292756

That does reflect the mindset of a command and control type of economy. I'm sure many holders of import licences, many railways workers and many agricultural producers in Muldoon's days thought the same. Then came Lange/Douglas.

Where NZ land/property is concerned, someone in the future will say: then came Ardern/Robertson.

It can only be a good thing to get back to affordability.

by TainuiBabe | 16th Dec 17, 1:22am 1513340542

You are spot on and I actually feel a little sorry for them. I had a lovely neighbour in Palm Heights who immigrated with his young daughter and he tried really hard to fit in with the Kiwi Lifestyle. He would often knock on my door and ask if my daughter could help with her homework around "New Zealand History and Facts", especially maori pronunciation. They were the best neighbours and always so quiet and polite. One day I came home and they were just gone. The house had a sold sign on it and I found out later that they just found it too hard to adapt to our culture. At that time, the GFC was still fresh and house prices had dropped. They bailed in a declining market. I do know many others that are so optimistic that our government will never let a housing bubble crash and I put this down to perhaps their naievity because they come from a country that is a closed off market and very much controlled by their government. So when they arrive in NZ, they are quite naieve to our Western style open markets where cycles are the norm for us and they only ever see the bull side of the equation.

by Groen_mamba | 15th Dec 17, 9:31am 1513283481

Ok, foreign speculators have been dealt with, now for the local ones. Bring on the rental loss ring fence!

by Averageman | 15th Dec 17, 10:11am 1513285909

by kiwimm | 15th Dec 17, 12:58pm 1513295921

Then add permanent DTIs to prevent this mess from happening again

by Averageman | 15th Dec 17, 5:14pm 1513311290

Lots of hand wringing over at specuvestor central. Based on the tone they seem more concerned at the removal of the 3% money and loss of capital speculation than the Nats lead us to believe was relevant. But they are all doing specuvestment for a decent yield and the good of their tenants....

https://www.propertytalk.com/forum/showthread.php?42443-Foreign-investo…

by NorthernLights | 15th Dec 17, 11:44am 1513291484

Average Mr
I’m the first to detest spruikers here but this legislation is lunacy as I’ve previously stated

by Didge | 15th Dec 17, 1:06pm 1513296377

Time will tell but I see that few here agree with you.

by Groen_mamba | 15th Dec 17, 1:13pm 1513296830

They have done a 100% more than the previous lot

by kiwimm | 15th Dec 17, 1:15pm 1513296920

Technically, 100% more of nothing is still nothing. This government has done something.

by Groen_mamba | 15th Dec 17, 1:19pm 1513297145

I stand corrected.

by theglc | 15th Dec 17, 3:14pm 1513304048

Great news for all Kiwis

by Property Leader | 15th Dec 17, 3:57pm 1513306650

So they are saying overseas people are not permitted to have a holiday home?
This potentially will stop companies buying up old homes and building tourist or other commercial properties?
"while also supporting our efforts to build a more productive economy, by helping redirect capital to productive uses." This is the same drivel that Nick Smith used to quote. What other country on earth (baring North Korea) would want their citizens to be poorly housed in order to make money available to build factories.

by TainuiBabe | 16th Dec 17, 1:27am 1513340832

New Zealand companies can still buy these properties and create jobs and revenue that stays on-shore at a reduced price. Winning!

by swapacrate | 16th Dec 17, 2:05am 1513343108

"while also supporting our efforts to build a more productive economy, by helping redirect capital to productive uses."

The simplistic way I see it is.

If I had $3 and rent/mortgage repayments are $1 then I can buy $2 worth of goods, this could be a whole raft of things.

If on the other hand I paid $2 towards rent/mortgage then I will only have $1 to spend.

This means that high property prices take away money from other businesses in NZ.

As for "citizens to be poorly housed".

How are they poorly housed when houses are more affordable if house prices drop. If house prices drop more people can buy property. Rent should become cheaper as yields are more easily met.

by John from Holland | 16th Dec 17, 5:22am 1513354937

What other country on earth (baring North Korea) would want their citizens to be poorly housed in order to make money available to build factories.

I don't think that is the intent nor will it be the result.

New Zealand has a long history of under investing in productive industries that creates jobs and wealth, if this changes then all New Zealand could benefit.

by PKchew | 16th Dec 17, 8:16am 1513365413

Lets wait and see if this legislation goes through as is (doubtful) and once its through see what the effect is. I dont know if there will be much effect if foreign buyers are only 3% of buyers nationally. (if that is true). If prices do decrease markedly, this will bring in the investors again into the market (ie buying at a lower price ) because rents are going up providing an increased yield....and there will be an equilibrium reached (around 8% yield?). So we will see.

by CJ099 | 16th Dec 17, 8:25am 1513365947

To give further support, what we really need is this bill of law to be passed here in NZ: Unexplained Wealth Orders: How to catch the corrupt and corrupt money.

On 27 April the UK parliament passed an important provision of the Criminal Finance Bill that introduces a powerful new weapon into the anti-corruption arsenal: Unexplained Wealth Orders. This follows action already taken in Australia and Ireland.

https://www.transparency.org/news/feature/unexplained_wealth_orders_how…