1 Dec 2015

Non-resident allowed to buy $8m home

8:19 am on 1 December 2015

An overseas buyer has been allowed to purchase a multi-million dollar investment home in Auckland, which he won't live in, after promising to set up a scholarship for children in a low decile school.

 Maohua Ye was able to buy the $8.08million mansion after saying he would set up a school scholarship

Maohua Ye was able to buy the $8.08million mansion after saying he would set up a school scholarship Photo: Open2View

Other conditions on the purchase of the Paremoremo Road house, which is situated near the prison, include employing a caretaker to look after indigenous plants.

According to Auckland Council, the 4ha property was valued at $4.05 million last year.

It just been bought for $8.08m by Maohua Ye from China.

His lawyer said the scholarship would take the form of $5000 grants for three schoolchildren per year and run for four years at a total cost of $60,000. It will go to students at decile 1 Otahuhu College.

Principal Neil Watson said he remembered discussions from about three or four months ago about a potential foundation for pupils, but had not heard anything since.

The house buyer's lawyer said the deeds of the foundation were now being finalised, including the selection criteria for children, and the scheme should start next year.

All the conditions attached to the house purchase have to be underway within 12 months.

Other conditions

Another of the conditions was employment - the man's lawyer said the equivalent of 1.5 full-time positions would be created, as the family would employ a caretaker.

The caretaker would look after indigenous vegetation on the property, working with Auckland Council and the Department of Conservation.

The Overseas Investment Office (OIO) says overseas buyers have to apply to invest in so-called "sensitive" assets in New Zealand, including sensitive land, and businesses worth over $100m. This application is classed as sensitive land.

RNZ News asked the OIO for more information about the sale and conditions, and whether it was common for investors to offer to set up a scholarship to get their houses, but the OIO was treating the questions as a request under the Official Information Act.

There are previous examples of sweeteners pledged by overseas buyers wanting to invest in New Zealand.

In June, a British couple were given consent to buy property in the Taupo area. They said they would make regular contributions to a local community group, and fund environmental initiatives.

In September, an Australian man bought land in Queenstown, saying he would contribute to the Queenstown Trails Trust in its development of a walking and cycling trail through the Wakatipu Basin.

A doubling in value

When asked how the house on Paremoremo Road had been valued at about $4m last year, but sold for over $8m this year, the buyer's lawyer said there had been construction work since the house and property was last sold.

He said the $8m price tag was close to the real value, and "was not a stupid offer."

Local real estate agents have told RNZ News that the most they had heard of homes going for in the area was about $5m, though luxurious rural homes were at a premium now as there was a shortage.

The six-bedroom house, with a pool and tennis court, will be used by the buyer's family when they visit the country, but their lawyer declined to say how often that might be.

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