Aussies are looking across the ditch in search of property investment returns, but it’s important to do your due diligence the buying process in New Zealand to avoid making tragic mistakes. Read on for some top tips.
Can foreigners purchase property in NZ?
The answer is generally yes, a non-resident can purchase a regular house or section of land without any restriction. The only exception is if the property is classified as being “sensitive land”, if this is the case OIA (Overseas Investment Act 2005) consent is required prior to purchasing. A standard suburban house would not be classified as sensitive. However, farms, lifestyle properties and holiday or waterfront homes could fall under this category.
If you are purchasing a property which requires OIA consent or if you are unsure whether or not it does, then you need to include an OIA consent condition in your sale and purchase agreement. This will give you the opportunity to consult with your lawyer and apply for consent if necessary.
What is OIA consent and how does one apply for it?
OIA Consent is required for overseas persons and their associates wishing to purchase sensitive land in New Zealand. An overseas person is anyone who is not a New Zealand citizen and does not normally reside in New Zealand.
According to the regulations, a company, partnership, joint venture and a trust can also be an overseas person. Determining whether OIA consent is required – and the actual application process – can be tricky, so it is essential to engage a lawyer who has experience in this area.
OIA consent is granted by the OIO (Overseas Investment Office,) based on several criteria including whether the transaction will benefit New Zealand and if the investor is intending to reside indefinitely in New Zealand. Each application is assessed on a case by case basis.
What are the most common mistakes overseas investors make when purchasing property in New Zealand?
Most easily avoidable mistakes stem from failing to get legal advice before entering into a sale and purchase agreement. Many foreigners don’t realise that once you have signed a sale and purchase agreement you are legally bound to this contract, there is no ‘cooling down period’ after signing – as is the case in many countries – and you cannot back out of the agreement if you change your mind. This means that it’s essential to get legal advice prior to signing the agreement, so that you know what type of land you are agreeing to purchase – and can include relevant conditions (such as finance, builder report, OIA consent etc.) in the contract.
Advice provided by conveyancingshop.co.nz
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