New Zealand weighs relaxing home-buying ban for rich foreigners

WELLINGTON – New Zealand is considering letting some wealthy foreigners buy luxury homes, creating an exemption to the current ban on overseas buyers, as it seeks to attract more high-net-worth investors.

The coalition government is expected to discuss the proposed change at a Cabinet meeting on Sept 1, according to people familiar with the matter.

If the measure is approved, an announcement would likely follow soon after, the people said.

The exemption would apply to houses worth at least NZ$5 million (S$3.78 million) and be limited to those holding so-called golden visas, said the people, who asked not to be named because they weren’t authorised to speak publicly.

Any changes won’t take effect until year-end, when reforms to the Overseas Investment Act are passed into law. 

A spokesperson for Prime Minister Christopher Luxon declined to comment.

In April, New Zealand

relaunched its golden visa programme

– called Active Investor Plus – to attract more high-net-worth people and enliven its lacklustre economy.

The visa relaunch coincided with increased global geopolitical tension resulting in a surge of interest from wealthy people looking for a haven.

Participants in the scheme, however, were banned from buying property in the country.

There were 267 applications for the golden visa that covered 862 people as at Aug 8, amounting to a potential total minimum investment of NZ$1.63 billion, data from Immigration New Zealand shows. Around 40 per cent of applicants are from the US. 

Since 2018, only citizens, tax residents and nationals from Australia and Singapore – due to trade agreements – can freely buy houses in New Zealand.

The ban was introduced by then-prime minister Jacinda Ardern due to concerns about unaffordable housing and following a passport-for-sale scandal involving PayPal co-founder Peter Thiel.

In 2023, Mr Luxon dropped an election campaign promise to overturn the ban and allow foreigners to buy houses worth more than NZ$2 million subject to a 15 per cent tax, following coalition talks with the New Zealand First Party.

Since then, Mr Luxon’s National Party and New Zealand First have been negotiating over the matter, which is seen as a major draw card to attracting foreign capital to the nation.

New Zealand First leader Winston Peters told Bloomberg News in March 2024 that he is open to allowing foreigners to buy expensive houses if they also invest in the country. 

In recent weeks, there have been indications from politicians that an announcement is imminent. Ten days ago, Finance Minister Nicola Willis told Bloomberg Television in New York that “a decision would be made by our Cabinet in the coming weeks”.

However, Mr Peters is a wily politician and skilled negotiator, who keeps his coalition partners on their toes. He has built his support with nationalist and – at times – anti-immigration rhetoric that has seen him accused of dog-whistle politics. His slogan for the 2023 election was “Let’s Take Back Our Country”. BLOOMBERG