The role of Councils in the 'foreign buyer ban'
The role of Councils in the 'foreign buyer ban'
Thursday 27 September, 2018
Councils should ensure that a property’s “property category” is included in the searchable property information available on their websites.
The Overseas Investment Amendment Act 2018 (“Amendment Act”) comes into force on 22 October 2018 and implements the much touted “foreign buyer ban” for residential properties in New Zealand. The Amendment Act amends the Overseas Investment Act 2005 (“Act”) and (among other things) makes “residential land” sensitive land under the Act. As from 22 October 2018 overseas persons acquiring interests in residential land will be required to obtain consent and meet certain ‘benefit to New Zealand’ tests.
“Residential land” is defined as land that has a property category of “residential” (R) or “lifestyle” (L) in the district valuation roll, which is required to be kept by local authorities under section 7 of the Rating Valuations Act 1998 and rules made under that Act.
Currently, under rules 2.1 and 2.2 of the Rating Valuations Rules 2008, the district valuation roll is not required to include the property category, but the property category must be kept and maintained by the local authority. We searched a few different Councils’ rating information databases and other public property related information available on those Councils’ websites, and most do not currently include the property category.
Given the changes resulting from the Amendment Act outlined above, the property category will be sought after information by lawyers, real estate agents and vendors and purchasers. To avoid an inundation of enquiries from these parties, we suggest that Council’s update their rating information databases to ensure that the relevant property category is prominently and clearly displayed.
For more information about the Amendment Act and its implications for local authorities, please contact Campbell Stewart.
