NZ Labour will ban foreign buyers

Prime Minister Jacinda Ardern. (Photo: Kevin Stent/Stuff)

NZ Labour will make all existing homes ‘sensitive’, effectively banning foreign buyers.

Prime Minister Jacinda Ardern will end foreign buying of existing houses by classifying them all as “sensitive” under the Overseas Investment Act.

This would effectively ban foreign speculators without affecting the TPP or most free trade agreements, Ardern said. Anyone who was not either a citizen or resident of New Zealand would not be allowed to purchase existing homes.

“The Government will introduce an amendment to the Overseas Investment Act to classify housing as ‘sensitive’ and introduce a residency test,” Ardern said in her first post-cabinet press conference.

“We stand strongly in the view that housing is a right.”

The effect of this change will be that non-residents will not be able to purchase existing homes in New Zealand – other than Australians and New Zealand citizens living overseas.

Ardern expected the legislation would be introduced by Christmas and passed in the new year. “This does not impact our Korean FTA, nor will it impact the TPP – if we pass it before it takes effect,” Trade Minster David Parker said.

This need to happened fast because if New Zealand signed up to the Trans-Pacific Partnership without doing so it would effect plenty of other trade agreements, effectively taking away the right to do this forever, Parker said. “If this is not done before TPP concludes if it does, then we effectively lose the right to control this forever.”

Foreigners would still be able to buy land and develop housing on it. “This is the time it needs to be implemented.”

Ardern said it could pose challenges for a deal with Singapore. Earlier on Tuesday, Parker indicated that the Korean free trade deal would not have be renegotiated. The law was not retrospective.

Ardern and Parker both indicated National had misled them on whether the Korean free trade agreement would allow a stamp duty.

“We’ve had advice that [a stamp duty] would be in breach of our FTA with Korea despite some of the assurances that were given by the past minister of foreign affairs, it appears he was incorrect,” Ardern said.

[Read the Stuff article].

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