The Government has bowed to pressure from developers and offered an exemption to the foreign buyers ban.
Economic Development and Trade Minister David Parker told reporters today that he was happy with recommendations from the Finance and Expenditure select committee that foreign buyers be able to purchase apartments off the plan and hold them for the purpose of renting, though not occupation.
The bill as drafted would have forced owners to on-sell apartments as soon as they were completed.
“We were concerned that if we didn’t allow that [change] we would shorten the supply of new housing in Auckland,” Parker said.
Parker said the line had been drawn at apartments because allowing exemptions for detached homes would be “too easy to use as an avoidance mechanism”. To be eligible for the exemption, the apartments must be bought off the plan and in multi-storey apartment buildings of twenty units or more.
Parker said that if policing the owner-occupier rules proved to be a problem, the rules could be changed, but it was important to have legislation prepared in advance of CPTPP as the agreement would remove the Government’s ability to legislate on the issue.
“What we have to do in advance of CPTPP was bring them into the screening regime. Once in, we can change the screening rules any time in the future,” Parker said.
“If we hadn’t done it before CPTPP came into effect we would have lost the ability to control overseas buyers, whether they were apartments or standalone, effectively forever,” he said.
Parker did not offer relief to winegrowers who are disappointed that their profit à prendre rights are being taken into the OIO regime.
Cutting rights on land over 5 hectares will come under the screening regime. Viticulturists have cried foul as forestry land is exempt up to 1000ha.
Parker said that this was about stimulating investment in forestry.
“We want to stimulate overseas investment in forestry, we don’t think that we need to be as permissive in respect of overseas ownership in farmland or horticultural land,” he said.