Photo: Devyn Staines
Govt to clarify rules for selling farmland to overseas buyers
The Government will clarify the criteria for foreigners buying New Zealand farmland in the coming days, and in the longer-term tighten how easily that land can be purchased by overseas buyers.
Associate Finance Minister David Parker said there needed to be clearer rules around how to prioritise the criteria for selling farmland under the Overseas Investment Act.
"What do you do with the existing discretions, which are already wide? What do you put priority on? There'll be announcements made on that in the next few days ... around the application of existing criteria.
"There are some interim solutions that can be achieved in terms of how those discretions are currently exercised."
The Government has already announced a ban on foreigners buying existing New Zealand homes, and will introduce a bill to achieve that before Christmas. The bill will reclassify New Zealand homes as "sensitive land" under the Overseas Investment Act.
Parker said the Government would eventually tighten the criteria around selling farmland to foreigners - though that was a longer-term goal and would not be part of the forthcoming announcement.
The longer-term changes would make it harder for overseas people to buy New Zealand farms, as well as make the application process simpler and "less frustrating".
He said the current criteria meant that any decision by the Overseas Investment Office could be justified.
"The rules that underlie the existing application of the Overseas Investment Act relating to rural land sales are terribly confused. There are discretions that go in all directions that would just about make legitimate any decision.
"That creates a lot of uncertainty and also a lot of work for the Overseas Investment Office. That needs to be sorted out."
Farmland greater than 5ha is considered sensitive land. Currently, a proposal to buy farmland is assessed under several factors including whether the buyer is of good character, and whether the sale would have economic benefits such as creating/retaining jobs, new technology, increased exports, greater productivity, or increased processing of primary products.
The OIO makes a recommendation to the Minister of Finance and the Minister of Land Information, who make the final call.
Between 2008 and 2015, 724 sales of sensitive assets were approved and only 11 declined.
