What is happening?
No doubt many heard New Zealand’s new prime minister, Jacinda Ardern, announce on 13 December 2017, that she will introduce legislation by Christmas to the New Zealand Parliament that will prohibit most nonresidents from purchasing homes in New Zealand starting some time in early 2018.
The background to this move is that for many years home prices have been rising beyond the means of most New Zealanders, espeically in Auckland and the other cities. It is beleived that foreigners have been speculating in the the New Zealand real estate market, driving up home prices. In July a surprising study was released showing that New Zealand has a far higher homelessness rate than any other OECD country, the US included. The study, published in Yale Global Online, is publicly available.
So Prime Minister Ardern is taking action. The government will introduce an amendment to the New Zealand Overseas Investment Act to classify residential housing as “sensitive,” and introduce a test for residency. Non-domiciled (meaning in-country for the previous 6-12 months) residents and noncitizens will be unable to purchase residential dwellings after the legislation becomes law, which is expected to take place in “early 2018.” Exceptions are Australians since the Australian government has a reciprocal agreement with New Zealand for residential home purchases.
What does it mean?
This means it will likely very soon be impossible for noncitizens and non-domiciled residents to purchase homes in New Zealand.
Some may be interested in our personal story. We first came to New Zealand in 1980 as a young married couple. Tim, in particular, fell in love with the place but was unable to practice the medicine he had just spent eight years training for because at that time New Zealand did not recognize American medical credentials. In 2002 Tim happened to discover online that the policy had changed and New Zealand was now welcoming American doctors, especially ones with rural general medical experience like his, and so, from then on, he has spent half the year in New Zealand (usually with but sometimes without his family), at first doing locums all over the country, and then, finally, in 2005, settling in Golden Bay. Rural general medical practitioners (called family physicians in America) are highly sought after here because the country is so predominantly rural (and Golden Bay is actually in dire need of medical help now), and so our family was granted “skilled migrant” status and it was easy to obtain our permanent resident within a year (only possible for physicians under the age of 56 and their families; Tim qualified just in time). Since we are permanent residents but do not live in New Zealand year-round, we are affected by the new ruling. When we sell our home we will be unable to purchase a new smaller one, as we had hoped. We will remain permanent New Zealand (non-domiciled) residents, however, and if in the future we remain in the country year-round, we would then be eligible for citizenship and to purchase residential land.