Monday, 7 May 2018

More problems with the stupid foreign buyer ban

I had missed the ADLS submission on the foreign buyer ban. It's another one of those "This is obvious when it's pointed out" things.

This bill is just so ridiculously bad.

Here's the ADLS's section 6.7.
A further serious consequence of the Bill would involve inheritance laws and the drafting of wills. Existing owners, whether they are New Zealand citizens, or considered as an overseas owner as per the definition in the Bill, if they bequeath part of their estate which includes residential or lifestyle land to a spouse, child or other person who would be considered an overseas person would need to take into consideration the hurdles that the Bill will put in their way. This may include overseas beneficiaries of a New Zealand family trust. We suggest that beneficiaries of a trust who are overseas persons must make a commitment to rent the property out or to divest themselves of the property within a given time frame. A couple may name their three children as executors of their will however one may be an overseas person. Would OIO consent be needed to transfer estate property to executors in this instance?
This gets messy for migrants living here with their kids, but where the rest of the family is back in the old country.

And here's 6.6
There could be unintended consequences of narrowing this wording, and even of including residential land as sensitive land in the Bill. Under section 10(1) of the current Act, a transaction requires consent for a transaction which will result in an overseas investment in sensitive land. Under section 12, an overseas investment in sensitive land is one where an overseas person or an associate of an overseas person acquires an interest in any land that is included in the Part 1 Schedule 1 list of sensitive land. This raises questions about the position of a married couple where one spouse is either a New Zealand citizen (and therefore is not captured by the Bill) or holds a permanent resident visa, and the other spouse holds a resident class visa but does not yet have a permanent resident visa. The second spouse would be captured by the Bill and would need to go through the onerous hoops of gaining consent before the couple could purchase a home. This could have serious consequences for property ownership within a relationship, the structuring of relationship property agreements, and divorce proceedings.
It will be interesting to see how much of this mess gets fixed in committee, and how much of it was intentional. Things that don't get fixed we might reasonably view as intentional. And a lot of what's in there, if it was intentional, is evil.

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