The changes to the NZ investor migrant policy that we flagged a couple of months ago have just been made operative. This should be of interest to developers seeking development funding. Migrants can now invest in residential property developments in order to secure residency.
Residential property development has been added as an “acceptable investment” for migration purposes so that the construction sector can benefit from investor migrants capital. It is also to make the investor category more attractive to migrants, who tend to like land as an investment class. If the migrants use the base “Investor” category then their investment would need to be at least NZ$1.5 million for four years to qualify. For the "Investor Plus" it is NZ$10 million for three years. There are various other requirements migrants must meet in order to secure residency. This article does not discuss these requirements. Our interest is in the opportunities this creates for development projects, not to advise on immigration.
The requirements for the investment in residential property include:
• It must be a new residential property development on either a greenfield or brownfield site e.g. a subdivision, construction of a new apartment building.
• It cannot be renovation or extension of existing developments e.g. adding to or renovating an existing house.
• The new developments must have been approved and consented by any relevant regulatory authorities (including council) i.e. resource consent and/or building consents must be secured and the costs associated with obtaining these are not part of the investment for immigration purposes.
• The purpose of the residential property investment must be to make a commercial return on the open market.
• Neither the family, relatives nor anyone associated with the migrant may reside in the development.
The Overseas Investment Act may be relevant and consent may be required – it depends on the type of land and the way the investment is structured. If you are interested in seeking funding from migrants please send me an e-mail denise@alexanderdorrington.co.nz.
