Coalition confirms foreign buyer ban on existing houses

The Coalition government says it will pass a law change before Christmas to ban overseas buyers from buying existing residential houses.

Prime Minister Jacinda Ardern says it will be an amendment to the Overseas Investment Act to classify residential housing as “sensitive.”

“That means non-resident or non-citizens cannot buy existing residential dwellings.”

She says Australians will be exempt because New Zealanders are not subject to foreign buyer curbs in Australia. 

“We expect legislation to be introduced before Christmas and take effect immediately once passed early in 2018.”

She criticised the National government for “putting foreign speculators ahead of Kiwi families.

“The advice we have had from officials is that we can give effect to the ban by a simple amendment to the Overseas Investment Act without breaching any agreement except the Singapore Closer Economic Partnership.”

The options with Singapore, she says, will be worked through.

The changes mean the new government can move its focus away from land issues at the negotiating table at Apec when negotiations on the TPP reach their final stages and focus on investor state dispute settlement clauses, she says.

“We are concerned by ISDS clauses in the proposed agreement. These confer greater rights on multinational companies investing in New Zealand than a New Zealand company has.”

Ms Ardern says her government is determined to amend the ISDS provisions of the TPP.

She says the cabinet has instructed trade negotiation officials to oppose ISDS provisions in any future free-trade agreements.

National finance spokesman Steven Joyce says Labour’s “ban” on existing housing is not a ban at all and raises more questions than it answers.

Mr Joyce says classifying residential housings as “sensitive” is just bureaucratic and does not constitute a ban.

“This proposal would also be a massive compliance cost for house buyers of all types,” he says.

He criticised what he says is a lack of detail on Labour’s behalf – saying there is very little evidence behind its plan.

“If the idea gets over all the hurdles, would it actually work in terms of satisfying the concerns of our trading partners? It appears on the face of it that it would treat investors from other countries less favourably than New Zealand investors.”