The Overseas Investment Office (OIO) legislation is confusing...
No wonder lawyers love it.
We appreciate it is not your job to assess if a client is eligible to buy their first home under OIO legislation, however you can save yourself some time and energy if you follow our 3-Step DIY Process.
For anything that is complex, please speak to a lawyer.
As mortgage advisors, you are often the first point of contact for a potential purchaser.
You are the gatekeeper weighing up:
1. Can this client get a loan?
2. Can they actually buy residential property in NZ?
You are experts at point 1, but if we cannot assess point 2 quickly, then you will end up wasting your own time filling out a loan application if they cannot buy residential property (yet).
Any client who is a New Zealand citizen automatically qualifies to buy residential property.
Waiting for a lawyer to confirm point 2 will always take time and may even cost your client money.
At the beginning of the home buying process, everything is urgent!
HouseMe Legal does not charge for this eligibility confirmation, but not all lawyers are built this way.
This process has been refined from the Residential Land Statement every purchaser must complete - click here to see this form.
Ask the client for a copy of their residency visa. If the client’s visa has been issued today, then they are eligible to purchase from today. This may seem obvious, but taking a client’s word for it will lead to disaster e.g. they think they have a residency visa but it’s a student visa, working visa etc.
Confirm the client can satisfy both these points:
(a) They have been residing (living) in New Zealand for the last 12 months; and
(b) Out of those 12 months, they have been present in New Zealand (not overseas) for 183 days or more.
This 12-month period applies retrospectively i.e. if the client’s residency visa was issued today, then their 12-month period is one year back from today. They do not need to wait another 12 months. This is the most common FAQ I receive.
Confirm the client is a tax resident in New Zealand.
Secret Tip - Regulation 45 - De Facto Partner Exemption If your client is purchasing property with their partner, they may be able to rely on the relationship property exemption under Regulation 45.
This exemption is very useful if one client is non-New Zealander (and does not qualify) and the other client qualifies.
Common examples where Regulation 45 works (note they do need to be de facto partners):
1. 3-Step DIY Process: Work through our 3-Step DIY Process.
2. Signing the Agreement: The client must be eligible when they sign the agreement, not at settlement day.
3.A Partner Exemption - NZ Citizen: New Zealanders love falling in love overseas - this exemption can be an absolute game changer if one-person qualifies.
3.B Partner Exemption - Qualifying NZ Resident: For clarity, the partner exemption also works if one of your clients can satisfy the 3-Step DIY Process.
4. KiwiSaver Warning: Watch out, your client may qualify but may not be eligible to use their KiwiSaver. This requires 3 years of contributions and some further qualifications.
