NZ Government Has Foreign Investor Laws Under Review

Foreign Investor Laws Under Review

At present, New Zealand’s Overseas Investment Act (2005) restricts most foreigners from purchasing existing homes. These laws were introduced in 2018 to protect domestic housing affordability. However, Peters has stated the Government is “talking about investment,” and that they are “changing those rules and what goes with them.” The focus appears to be on allowing exceptionally wealthy individuals—those contributing “millions” or even “billions” to the economy—to buy luxury homes, without jeopardising broader housing market stability.

While Peters insists that the “foreign buyers ban will remain,” discussions suggest the Government is exploring ways to accommodate large-scale investment under revised rules.

Who Will Be Affected?

High-net-worth foreign investors stand to benefit from this potential policy shift. While National previously proposed a $2 million threshold, both NZ First and Prime Minister Christopher Luxon have acknowledged that figure is likely too low. Instead, thresholds of $5 million or more are being discussed. This change could open the door to individuals investing via channels such as the Active Investor Plus Visa, which was recently relaxed to encourage overseas capital.

New Zealand homeowners and buyers may view this development with concern. Although the Government says any change will avoid disrupting the market, critics could argue that reintroducing foreign money into the high-end property segment risks inflationary pressure on premium housing stock. It remains to be seen whether the policy design can achieve its stated goal—creating jobs and boosting the economy—without contributing to inequality or perception issues around housing access.

Property developers and legal professionals will also need to adjust to the shifting landscape. Any redefinition of what qualifies as a legitimate “investment” under the Overseas Investment Act could influence development patterns, legal compliance, and the advisory services needed for overseas clients.

What’s Next for Foreign Investor Laws?

Winston Peters has made clear that a “substantial” investment threshold is being considered, and that a full policy announcement may be made by the end of 2025. The messaging from Government has been deliberately cautious, with Peters stating: “We’re talking about investors. They’re bringing billions to this economy. They’re not buyers.”

Meanwhile, ACT Party leader David Seymour has voiced his support for reform, describing such investment as “generally a win-win for New Zealand.” Prime Minister Luxon, too, has indicated openness, though he has refrained from committing to specifics while coalition negotiations continue.

With New Zealand’s foreign investor laws under review, businesses, property owners, and prospective overseas investors would be wise to prepare for potential changes. Whether you’re seeking to invest, develop, or protect your interests, understanding the implications of this evolving legal environment is critical.