We have been covering the popularity of the NZ Active Investor Resident Visa (AIP) for the last few months. In November I also highlighted the Business Investor Visa (BIV) and the Start Up Visa (SUV). Not sure whether the SUV will see the light of day now – things have gone a bit quiet.
Anyway, some good news has quietly made it out just before the Christmas holiday. Anyone holding an AIP Visa will be allowed to buy a residential home in NZ. This country has a chronic shortage of housing stock (although there are signs that things may be improving). Since 2018, overseas people have been banned from buying homes here unless they become “ordinarily resident”, which largely boils down to having been in NZ for at least 6 months in the last 12 months after getting Residence. There are only a couple of exemptions, being Australia and Singapore.
An amendment to the Overseas Investment Act was announced in a joint Ministerial press release on 13 December. This makes the AIP Resident Visa a “qualifying investor visa”. It appears that the migrant must still apply to the Overseas Investment Office (OIO) for approval to buy the property, but having an AIP visa in hand gets the stamp of approval.
The Catch?
The house must be worth at least NZ$5 million. This has a certain symmetry with the minimum amount of investment required to qualify for Active Investor, which is either $5 million or $10 million depending on which class of investments you choose – see our blog on this. The rationale is that buying such property does not deplete the housing stock for those who want to buy their first home.
There are plenty of places available at or above this price point, and in desirable locations. Just two examples are Waiheke Island in Auckland’s Hauraki Gulf (great vineyards, too) and Queenstown.
Points to Note
The first is that, although you can shop around for a nice place to live while preparing to get the Investor Resident Visa approved, do not sign any sale and purchase deals until after the Resident Visa is issued. This is at least partly because you won’t be permitted to complete the purchase anyway – unless the real estate agent or the vendor’s lawyer overlooks the overseas buyer rules, which would be difficult for them to do anyway owing to checks in the registration process. The alternative would be to sign up an agreement which is conditional on being legally entitled to own NZ residential property.
The second is that nothing less than the Resident Visa will fit the bill here. If an applicant’s assets back home are found to be acceptable “nominated funds” for investment Residence, they are issued an Approval in Principle and given 6 months to invest (which can be extended in some cases by request). They are also offered a temporary visa, if they need one, to be able to visit and investigate their investment options. This could be a Work Visa. A Work Visa alone will not be a qualifying investor visa which I mentioned above, so that it can’t be used to buy a house.
In order to take advantage of this upcoming relaxation of the overseas property rules, people must first complete their investment in New Zealand businesses or other available investment vehicles.
When the AIP scheme opened in April there was a great flurry of applications which had backed up during the years of the previous failed Active Investor policy. This seems to have settled down somewhat, although there is still a very healthy volume of interest and visa approvals. Our recent experience is that a well-prepared application can be approved within weeks of being filed.
If the chance to own a home of your own in New Zealand is an attractive incentive to go down this path, get in touch with us to have a conversation about it.