The New Zealand Overseas Investment Amendment (OIA) Bill is due to be passed today, limiting overseas property investors from purchasing property in New Zealand.
The controversial overseas investment bill will ban foreigners from acquiring most types of houses in New Zealand, although they will still be allowed to purchase apartments in multi-storey buildings.
Buyers from Australia and Singapore will be exempted from the legislation.
New Zealand’s Prime Minister Jacinda Ardern believes it can reduce property prices, which have skyrocketed over recent years.
According to the media, international buyers amounted to over 18 per cent of property purchases in Auckland, New Zealand’s biggest city.
The Overseas Investment Amendment (OIA) Bill has been making its way through the legislative process since December last year and will have its third and final reading in the House on today, when it is likely to become law, as it is also supported by the Labour, Green, and New Zealand First parties.
The introduction of the Bill was one of the first announcements made by the new Coalition Government, late last year.
Opposed by the National and ACT parties in New Zealand, the bill was intended to pass earlier in the year, as it needed to be in place before the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) came into effect.
But once the timeframe for the CPTPP was extended, the Government extended the process of the OIA Bill so to allow for a longer process.
The New Zealand Institute of Economic Research said the Overseas Investment Amendment Bill was a ‘poorly-designed solution to a poorly-defined problem’, whilst the IMF also agreed that the legislation is ‘unlikely’ to have a significant impact on housing affordability.
After many debates the bill was amended to allow overseas property investors to buy new apartments off-plan or to develop new homes in New Zealand.
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