Do you need consent to purchase land in New Zealand?
You may need to apply to the Overseas Investment Office (OIO) for consent if you are an overseas person, or an associate of an overseas person, and you wish to acquire land.
This applies to land which is considered sensitive. To find out if the land you wish to buy is sensitive, check this link but also make sure you get legal advice because often significant legal and land expertise is required, particularly if there are nearby waterways.
Applicants for consent must satisfy a number of criteria, including the core “investor test” criteria. In addition, consent to acquire sensitive land will only be granted if:
· the transaction will, or is likely to, benefit New Zealand, or alternatively
· the relevant overseas person intends to reside in New Zealand indefinitely.
Some types of land (such as farm land) also have specific consent criteria.
The Minister of Finance issued a new Ministerial Directive Letter to the OIO. The letter, dated 8 December 2010, takes effect from 13 January 2011 and provides direction to the OIO, as regulator of the Overseas Investment Act 2005, about particular factors that are of greater relative importance when assessing investments in large areas of farmland.
The letter notes, as an indicative guide, that an overseas investment in farm land would be considered 'large' if it were to result in the relevant overseas person owning or controlling an area of land that is more than ten times the average farm size for the relevant farm type.
You can view here a table showing the average size of various farm types (PDF 32KB).
Determining if consent is required and applying for consent generally requires significant legal and land expertise. Seek assistance from a professional adviser as early as possible to help ensure a smooth transaction.
The OIO cannot give legal advice or consider draft applications.