28 Nov 2017

Govt to reveal plan for foreigners buying NZ farmland

12:41 pm on 28 November 2017

The government will reveal its plan to deal with existing applications for foreign purchases of farmland in the next few days.

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David Parker Photo: RNZ / Demelza Leslie

Associate Finance Minister David Parker said the new approach would be around how existing criteria were applied, rather than changes to the criteria themselves.

"There are two layers to that - what do you do with the existing discretions which are already wide, what do you put priority on? And there will be announcements made on that in the next few days.

"Then there's the underlying issue of whether the [Overseas Investment] Act should be changed so as to narrow the range of discretions."

Any delays in approving or declining applications to buy farmland before the election were the responsibility of the National government, said Mr Parker.

"There will have been additional delays caused by the resetting of how these matters are dealt with post-election, but that will be brought to a head very soon."

Mr Parker described the rules for foreign purchases of farmland sales as "terribly confused".

"There are discretions that go in all directions that would effectively make legitimate just about any decision.

"That creates a lot of uncertainty and also a lot or work for the Overseas Investment Office".

He said there were some interim measures that could be taken to address how those "discretions are exercised" but the longer term plan was to change the Act and its underlying regulations to make it simpler.

New Zealand farmland

Photo: 123rf

The end result would be to have fewer applications "get through the gate", but once they do, to be dealt with a lot faster, he said.

The coalition deal between Labour and New Zealand First includes an agreement to "strengthen the Overseas Investment Act and undertake a comprehensive register of foreign-owned land and housing".

Mr Parker also said a new law effectively banning the purchase of existing residential homes by foreign buyers would be passed by the end of the year.

He said that would be done through changes to the Overseas Investment Act, to include New Zealand homes within classification of what is deemed to be 'sensitive land'.

Overseas buyers would still be able to buy land to build houses which they can sell, or let.

Mr Parker said there would have to be additional funding for the Overseas Investment Office to deal with the restrictions on overseas purchases of existing New Zealand homes, but not to deal with rural land applications.

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