Foreign property ownership in spotlight after New Zealand ban

 

Last week, in a bid to curb house prices and increase homeownership in New Zealand, the government has confirmed a ban on foreigners buying homes in the country.

Existing homes in New Zealand can no longer be purchased by buyers from overseas after the Overseas Investment Amendment Bill was passed last week. The idea behind the Bill was to help more locals onto the property ladder, after a surge of foreign buyers in recent years saw supply levels dwindle and house prices soar.

According to statistics published in the New Zealand Herald, homeownership levels last year fell to their lowest rate for 66 years, with just 63.2% of adults living in their own home – down from a high of 73.8% in 1991. Part of the reason for this has been put down to the unaffordable housing market, with areas such as Auckland seeing property prices rise by as much as 75% over the past four years, leaving many people blocked from buying.

‘Tenants in our own land’

The only nationalities that will still be able to purchase property in the country will be buyers from Singapore and Australia, according to the new rules, although foreign buyers from anywhere will still be able to buy apartments in large, off-plan blocks, so as to continue to encourage new homes being built for New Zealanders.
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Commenting on the new legislation, David Parker, the associate minister of finance, said: “We think the market for New Zealand homes and farms should be set by New Zealand buyers, not overseas buyers.

“That is to benefit New Zealanders who have their shoulder to the wheel of the New Zealand economy, pay tax here, have families here. We don’t think they should be outbid by wealthier people from overseas.”

He added during his speech to parliament last week: “We should not be tenants in our own land.”

Foreign property ownership in the UK

Over the past year, there has been a crackdown on foreign owners of UK property, in a bid to prevent illegal activity and money laundering with the country’s housing market.

Foreign companies who buy UK properties will be obliged to reveal who ultimately owns the property on the world’s first public register, and anyone found to be illegally profiting from such a purchase could face up to five years in jail.

Commenting on the new rules, business minister Richard Harrington said: “The UK is known around the world for its open and dependable business environment and this reputation is maintained by keeping under review our required high standards.

“That is why we are introducing the world’s first public register which will expose the ultimate owners of overseas shell companies, giving authorities the information they need to come down on criminals who launder their dirty money through the UK’s property market and to seize the proceeds of crime.”

“While the vast majority of foreign companies which buy property in the UK do so legitimately, this world-leading register will help ensure the UK remains a great dependable place to work, invest and do business.”

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Foreign property ownership in spotlight after New Zealand ban

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