New Zealand Eases Foreign Buyers Ban for Luxury Homes

The New Zealand government has announced a new exemption to its foreign buyers’ ban, allowing some wealthy foreigners to purchase luxury homes once again. This decision follows months of negotiations between the National Party and New Zealand First, which originally supported the ban implemented in 2018 during a coalition with the Labour Party.

Under the newly unveiled policy, announced by Prime Minister Christopher Luxon, individuals holding “golden visas” will be permitted to buy or build a single residential property valued at a minimum of $5 million. “This change navigates a path between those who do not want foreign ownership opened up and the desire to attract high net worth investors,” Luxon stated. He emphasized that this move aims to deepen connections with significant investors, contributing to New Zealand’s economy.

Winston Peters, leader of New Zealand First, confirmed that strict restrictions accompany this policy. The regulations explicitly exclude the sale of rural, farm, and sensitive land. Peters highlighted that the $5 million price threshold effectively eliminates over 99 percent of homes available in the New Zealand market from foreign purchase. He described the change as a balanced approach to protect the local housing market while allowing substantial investments that can benefit the economy.

Since the introduction of the foreign buyers’ ban in 2018, foreign purchasers have largely been unable to enter the housing market. This restriction was originally implemented to address rising concerns about housing affordability. Some exceptions have allowed buyers from Australia and Singapore under existing trade agreements.

The new exemption is part of the government’s Active Investor Plus program, which offers two pathways to residency. These include a minimum investment of $5 million over three years in higher-risk ventures or a $10 million investment over five years at a lower-risk threshold. Recent data from Immigration New Zealand indicates that there have been 267 golden visa applications, encompassing 862 individuals and representing a potential investment of $1.6 billion. Approximately 40 percent of these applicants are from the United States.

Prime Minister Luxon noted that the number of applications has now surpassed 300, with an anticipated investment value of $1.8 billion. The National Party had previously campaigned in 2023 to allow foreign buyers to purchase homes valued over $2 million with a 15 percent tax, but this plan was abandoned during coalition negotiations with New Zealand First. Luxon acknowledged that the $2 million threshold was set “too low” and that negotiations have continued between the parties.

In October, Peters suggested to NewstalkZB that he might consider adjustments for the “right person with the right investment,” but he insisted that it would require a significantly higher figure than “a lousy $20 million.” A spokesperson for Peters previously indicated that any changes must be substantial enough to create jobs and positively impact the broader economy without disrupting the housing market.

This new exemption marks a notable shift in New Zealand’s approach to foreign investment in the housing sector, reflecting the government’s intent to balance economic growth with the need for housing affordability for its citizens.