27/10/17

New Zealand may tighten law that allows mega wealthy to buy citizenship

Housing minister says legislation that paved the way for Peter Thiel to become a New Zealander will come under scrutiny, reports The Guardian.

New Zealand’s new Labour government will reconsider legislation that allows wealthy foreigners to effectively buy citizenship, the housing minister has said.

In an interview with the Guardian about the housing shortage in New Zealand, Phil Twyford said the law that allowed Trump donor and Paypal co-founder Peter Thiel to become a citizen and buy a bolt hole in the South Island would come under scrutiny.

Since coming into power last week, Labour has said it will ban foreigners from buying existing homes, along with a slew of policies aimed at addressing the housing crisis, which has seen homelessness grow to more than 40,000 people.

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However, the ban will not apply to foreigners who gain citizenship in New Zealand – a loophole that billionaire Thiel used, after spending a total of 12 days in the country.

Thiel’s fast-tracked citizenship allowed him to buy multiple properties in New Zealand, even though he told the government he had no intention of living in the country, but would be an “ambassador” for New Zealand overseas instead, and provide contacts for New Zealand entrepreneurs to Silicon Valley.

“That was a discretionary decision that was made at the time [Thiel’s citizenship], and we were very critical. Our policy, banning people would apply to everybody, regardless of how much money they have or what country they come from,” Twyford said.

“We haven’t announced policy on that [tightening the investment immigration criteria] but I think it is probably something that we are likely to look at.”

Twyford said New Zealand’s ban on foreign buyers was modelled on similar legislation in Australia, and was designed to ensure New Zealanders can once again achieve the Kiwi dream of owning their own home.

“We’ve seen house prices in our biggest city Auckland double in the last nine years, we’ve got the lowest rate of home-ownership since 1951, and we have what the Salvation Army describes as the worst homelessness in living memory,” said Twyford, who has only officially been in office one day.

“Housing has come to be seen as an investment asset primarily, rather than a place for people to live and bring up a family. Off-shore money coming into the market has been a significant contributor to that.”

The ban – to be introduced within 100 days – will apply to every nationality and every income bracket worldwide, including Australians, and will apply equally to business, trusts, companies and individuals.

For foreigners to be able to purchase property they’ll need to become a permanent resident or citizen of New Zealand - which will become increasingly difficult with Labour pledging to slash high-rates of immigration - a record 70,000 last year.

The ban on buying foreign homes will only apply to existing dwellings, with Twyford saying New Zealand would continue to “welcome” overseas buyers who wanted to build new homes, or invest in apartment blocks.

According to Twyford, Auckland had built up a shortage of 40,000 homes, with the deficit increasing by 7,000 every year at the current build rate. Among Labour’s new policies is a plan to build 100,000 affordable homes in New Zealand within the next decade, stop the sell-off of state housing and build new state housing.

“Uncontrolled foreign investement for the purposes of speculation is actually destructive and it is a feature of a housing market that has utterly failed...We expect it [the ban] will be permanent, ” said Twyford, who added the government would increase the length of tenancies for renters and introduce legislation ensuring rental properties were insulated, warm and dry within 100 days.

“We don’t see any benefit to people who are not citizens or permanent residents of this country being able to speculate in housing and make a profit at the expense of generation rent.”