The Government is set to introduce legislation to ban foreign buyers from buying existing homes and to force them to sell any new homes or apartments that they build.
Housing and Urban Development Minister Phil Twyford and Land Information Minister Eugenie Sage announced that legislation would be introduced into Parliament tomorrow to designate residential land as sensitive land under the Overseas Investment Act, effectively banning non residents who are also non-citizens from buying and holding homes.
The legislation is set to be debated in its first reading next Tuesday, with a select committee process early next year before being passed by the end of March.
"It will mean for practical purposes that foreign buyers will not be able to buy residential property unless they are either increasing the number of residences and then selling them or converting the land to another use," Sage said.
Anyone who is not a permanent resident will have their application screened by the Overseas Investment Office.
The time period over which foreign builders of homes or foreigners buying apartments off the plan must sell on the new dwelling has yet to be set. A spokeswoman for Twyford said there was an exemption for rest home operators and other long-term accommodation providers such as hotels.
Twyford said Singaporean buyers may join Australians as exempt from the rules if New Zealand cannot agree a new trade agreement. New Zealand's Trade Agreement with Singapore was the only one preventing such a foreign buyers' ban.
Foreigners will still be able to buy land less than five hectares and land bank it, although Twyford said the Government planned other measures to discourage land bankers.