Overseas Investment Act 2005

Schedule 1AA Transitional, savings, and related provisions

s 8B

Schedule 1AA: inserted, on 22 October 2018, by section 49 of the Overseas Investment Amendment Act 2018 (2018 No 25).

Part 1 Provisions relating to Overseas Investment Amendment Act 2018

1 Existing transactions and applications not affected

(1)

The amendments made by the Overseas Investment Amendment Act 2018 apply only to transactions entered into on or after commencement.

(2)

In particular, this Act and the regulations, as in force immediately before commencement, continue to apply to the following as if the Overseas Investment Amendment Act 2018 had not been enacted:

(a)

any transaction entered into before commencement:

(b)

any application for consent that is made before commencement and that relates to a transaction entered into before commencement:

(c)

any application for consent that is made after commencement and that relates to a transaction entered into before commencement.

(3)

Subclause (2) does not limit subclause (1).

(4)

In this clause, entering into a contract or an arrangement before commencement is a transaction that must be treated as being entered into before commencement even if, immediately before commencement, the transaction is subject to a condition precedent.

(5)

If a sale or transfer of property or securities, or the issue, allotment, buyback, or cancellation of securities, occurs without a contract or an arrangement being entered into or an understanding being arrived at, the transaction must be treated as being entered into for the purpose of subclauses (1) and (2) when the property or securities are sold or transferred or the securities are issued, allotted, bought back, or cancelled (as the case may be).

(6)

In this clause, clause 2, and clause 3, commencement means the commencement of this clause.

Example

A is an overseas person.

Before commencement, A enters into a sale and purchase agreement to buy a house that is on residential (but not otherwise sensitive) land. At that time, the land is not sensitive under this Act. The agreement is subject to a finance condition.

After commencement, the finance condition is satisfied and the agreement becomes unconditional. Settlement occurs 1 month later.

The transaction does not require consent under this Act because the transaction was entered into before commencement (that is, at a time when the residential land was not sensitive land and its purchase did not require consent).

2 Existing transactions: benefit to New Zealand test relating to sensitive land that will be used for forestry activities

(1)

This clause applies to a transaction entered into before commencement if consent is not given for the transaction before commencement.

(2)

Despite clause 1,—

(a)

an application for consent for the transaction may be considered under the benefit to New Zealand test applying section 16A(3) or in accordance with section 16A(4), as inserted by the Overseas Investment Amendment Act 2018; and

(b)

the other provisions of this Act, as amended by the Overseas Investment Amendment Act 2018, apply accordingly.

(3)

Clause 1(4) and (5) applies for the purposes of this clause.

3 New information-gathering powers and service provisions apply to matters before or after commencement

(1)

Despite clause 1,—

(a)

the regulator may exercise a power under section 41 (as in force after commencement) in connection with any transaction, act, omission, or other matter regardless of whether the transaction, act, omission, or other matter occurred before or after commencement; and

(b)

sections 54 to 55A (as in force after commencement) apply to any document that is served after commencement regardless of whether the document relates to a transaction, act, omission, or other matter that occurs before or after commencement.

(2)

However, section 54 (as in force after commencement) does not apply to a holder of an exemption under section 61D if the exemption was continued in force under clause 4(2) of this schedule.

(3)

Sections 41A to 41E (as in force after commencement) apply for the purposes of subclause (1)(a).

4 Existing exemptions saved

(1)

An exemption made under section 61(1)(i) that is in force immediately before the commencement of section 46 of the Overseas Investment Amendment Act 2018 continues in force as if it were made under section 61C of this Act.

(2)

An exemption granted under regulation 37 of the Overseas Investment Regulations 2005 that is in force immediately before the commencement of section 46 of the Overseas Investment Amendment Act 2018 continues in force as if it were granted under section 61D of this Act.

(3)

However, sections 61B, 61D(3), 61E, and 61F(5)

(a)

do not apply to those exemptions as granted; and

(b)

do not apply (other than section 61D(3)) to a minor or technical amendment to those exemptions, or to a replacement of those exemptions with only minor or technical amendments, made after the commencement of section 46 of the Overseas Investment Amendment Act 2018.

5 Exemption relating to existing Resource Management Act 1991 requirements

(1)

This clause applies if an overseas person (A), or a person (B) on behalf of an overseas person, is (in effect) required to acquire an interest in residential (but not otherwise sensitive) land because of—

(a)

a condition of a resource consent granted under the Resource Management Act 1991 before the commencement of this clause; or

(b)

any other requirement imposed by or under that Act and that is imposed on A or B before the commencement of this clause.

(2)

A transaction does not require consent for the purposes of section 10(1)(a) to the extent that it will result in an overseas investment in sensitive land that is the acquisition of that interest in residential (but not otherwise sensitive) land and is entered into by A or B for the purpose of satisfying that condition or other requirement.

6 Exemption relating to dwellings in large apartment developments where sales of dwellings have begun before assent date

(1)

This clause applies in respect of land that is being used, or intended to be used, for 1 (or more) of the following (a development):

(a)

in the construction of 1 or more multi-storey buildings as 1 development, where each building consists, or will consist, of at least 20 residential dwellings; or

(b)

to increase the number of residential dwellings in 1 or more multi-storey buildings, where the number of residential dwellings in each building will be increased by 20 or more.

Exemption certificates

(2)

A person involved in the development (the developer) may apply for an exemption certificate no later than the expiry of the 6-month period that starts on the date of Royal assent of the Overseas Investment Amendment Act 2018 (the assent date), specifying the land that constitutes the development (in a way that enables its boundaries to be clearly identified).

(3)

The relevant Minister or Ministers may grant an exemption certificate if they are satisfied that—

(a)

at least 20 new residential dwellings that are not completed at the assent date (the new dwellings) will be, or are likely to be, completed in the development before the expiry of the 5-year period that starts on the assent date; and

(b)

on or before the assent date, a transaction has been entered into by the parties in good faith in the ordinary course of business for the acquisition of 1 or more of the new dwellings that the relevant Minister or Ministers are satisfied will be, or are likely to be, completed in the development before the expiry of that 5-year period.

(4)

In considering whether the matters in subclause (3) are met, the relevant Minister or Ministers may have regard to factors such as—

(a)

whether the development has appropriate resource consent, building consent, and any other relevant authorisations; and

(b)

the developer’s financial strength; and

(c)

the previous activity of the developer (or its associates or individuals with control) regarding use of residential land; and

(d)

the previous record of the developer (or its associates or individuals with control) in complying with consent conditions or applying for consent conditions to be varied.

(5)

An exemption certificate must be applied to 100% of the new dwellings in the development.

Exemptions for dwellings to which exemption certificate applies that are purchased from developer

(6)

A transaction does not require consent for the purposes of section 10(1)(a) to the extent that it will result in an overseas investment in sensitive land in respect of a residential dwelling in the development if—

(a)

the relevant land is residential (but not otherwise sensitive) land; and

(b)

an exemption certificate applies to the dwelling under subclause (5); and

(c)

the person (the purchaser) acquires the relevant land before the expiry of the 5-year period that starts on the assent date; and

(d)

the purchaser acquires the relevant land from—

(i)

the developer; or

(ii)

another person from whom the exemption certificate permits the purchaser to acquire the relevant land in reliance on this exemption.

Other provisions

(7)

In any exemption certificate granted under this clause, the relevant Minister or Ministers—

(a)

must specify the land that constitutes the development; and

(b)

may specify persons or classes of persons for the purposes of subclause (6)(d) having regard to the purpose of this exemption, which is to allow persons involved in the construction of new dwellings to sell those dwellings (but not the development) to an overseas person as the first sale of the dwelling without the overseas person requiring consent.

(8)

The relevant Minister or Ministers may, with the agreement of the developer, vary an exemption certificate granted under this clause to the extent that it relates to the following:

(a)

the developer:

(b)

the persons specified under subclause (7)(b).

(9)

For the purposes of Part 2 of the Act, exemption certificate includes an exemption certificate granted under this clause.

(10)

Clause 1(4) and (5) applies for the purposes of this clause as if references to commencement were references to assent date.

7 References to Land Transfer Act 2017

(1)

This clause applies until the Land Transfer Act 1952 ceases to apply to instruments lodged for registration or endorsement.

(2)

The definition of lodged in section 51A of this Act must be treated as including lodged for registration or endorsement under the Land Transfer Act 1952 or the Land Transfer (Computer Registers and Electronic Lodgement) Amendment Act 2002.

8 Section 61G applies to conditions before and after commencement

Section 61G may apply to a condition regardless of whether the condition came into effect before or after the commencement of this clause.

9 Provisions relating to exemptions in clauses 6 and 8 of Schedule 3

(1)

For the purposes of clause 6(4)(b)(i) of Schedule 3, the acquisition (or treated acquisition) of a forestry right by a related forestry investor is to be disregarded if the acquisition (or treated acquisition)—

(a)

was made before commencement; or

(b)

was made on or after commencement but resulted from a transaction referred to in clause 1(2)(a) of this schedule.

(2)

For the purposes of clause 8(4)(b)(ii) of Schedule 3, it does not matter if a regulated profit à prendre was first held (or treated as first held) by a related profit investor—

(a)

before commencement; or

(b)

on or after commencement as a result of a transaction referred to in clause 1(2)(a) of this schedule.

(3)

In this clause, commencement means the commencement of clause 1 of this schedule.

10 Review of amendments relating to forestry

(1)

The Minister must—

(a)

carry out a review of the operation and effectiveness of the amendments made by the Overseas Investment Amendment Act 2018 relating to forestry (including forestry rights); and

(b)

prepare a report on that review, including the Minister’s recommendations for amendments to this Act (if any); and

(c)

present the report to the House of Representatives as soon as practicable after it has been prepared.

(2)

The review must be started within 2 years after the commencement of this clause.

Part 2 Provisions relating to Comprehensive and Progressive Agreement for Trans-Pacific Partnership Amendment Act 2018

Schedule 1AA Part 2: inserted, on 30 December 2018, by section 70 of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership Amendment Act 2018 (2016 No 90).

11 Application

The amendments to the Act made by the Comprehensive and Progressive Agreement for Trans-Pacific Partnership Amendment Act 2018, and the regulations made under section 61A, apply only to the acquisition of rights or interests in securities or of other property, or the establishment of any business, after the commencement of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership Amendment Act 2018.

12 No refunds

No person is entitled to a refund of any fee or charge paid to the regulator for a matter under Schedule 2 of the Overseas Investment Regulations 2005 on the ground that regulations made under section 61A mean that the matter is no longer relevant (for example, that a consent that had been applied for is no longer required).

13 Validation of exemptions for Australian investors

Nothing in the Comprehensive and Progressive Agreement for Trans-Pacific Partnership Amendment Act 2018 affects the validity of the Overseas Investment (Australia) Amendment Regulations 2013, which are also declared to have been lawfully made and to be and always have been valid.