NZ to ban foreign buyers of existing homes but says change would comply with TPP-11
By Paul McBeth
Oct. 31 (BusinessDesk) - Prime Minister Jacinda Ardern announced plans to effectively ban foreign buyers of existing residential property but says the prohibition doesn't put New Zealand at odds with the slimmed down version of the Trans-Pacific Partnership deal.
In her first post-Cabinet press conference, Ardern and Trade Minister David Parker unveiled the plan to introduce legislation to amend the Overseas Investment Act restricting foreign buyers of existing residential property before Christmas and passing the law early next year, saying the move had the backing of the NZ First and Green parties.
That would take the heat out of future property bubbles by blocking overseas speculators, and wouldn't breach existing free-trade agreements with the exception of the Singapore Closer Economic Partnership, Ardern told reporters in Wellington.
It also removes the newly installed Labour-led government's biggest objection to signing up to the TPP-11, leaving Investor State Dispute Settlement (ISDS) clauses the biggest remaining bone of contention and Ardern said negotiators had been tasked with trying to amend those provisions in the deal.
"We have given a new mandate to negotiators around these clauses," Ardern said. "We will do all we can at this late stage to negotiate in the best interests of New Zealand and New Zealanders when it comes to the use of ISDS clauses."
Ardern said Cabinet also issued instructions to trade negotiators that future FTAs don't include ISDS clauses. She declined to say whether New Zealand would walk away from the deal if it doesn't get traction on the ISDS clauses.
That move comes as members of the European Parliament's trade committee visit New Zealand as a precursor to formal negotiations of a free trade deal. European policymakers are keen to abolish ISDS provisions in favour of a new public court system and chair Bernd Lange today told BusinessDesk that could be a key plank in negotiations with New Zealand.
Ardern said the government's plan won't apply to Australian citizens because New Zealanders have reciprocal rights to buy property across the Tasman, and won't prevent foreign buyers of land to develop new housing. It also won't be retrospective, she said.
The Overseas Investment Office will focus on applications relating to the purchase of land building existing housing and will need appropriate resourcing, Ardern said.
"Land-banking is an issue also we will be looking at in further detail, at the moment, our priority has been dealing with this issue as quickly as we can because these OIO provisions need to be resolved sooner rather than later," Ardern said.