- Homeowners attempting to bypass the foreign buyer ban by adding expensive chattels risk legal trouble.
- Joanna Pidgeon warns that adding items like cars to meet the $5m threshold is illegal.
- Stuart Nash advises sellers to consult the Overseas Investment Office before including high-value chattels.
Homeowners who think they can circumvent the foreign buyer ban by adding an expensive car or boat to their list of chattels could fall foul of the law, a real estate expert has told OneRoof.
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The warning comes as questions mount about the Government’s new investor visa, which allows overseas holders to buy or build one New Zealand home with a minimum value of $5 million.
Some of the details in the policy are still under wraps, prompting some in the market to ask about potential loopholes that could make sub-$5m houses eligible for wealthy foreign buyers.
Finance Minister Nicola Willis told OneRoof this month that the Government was still working out the details but planned to enact its legislative changes in the first half of 2026.
Lawyer Joanna Pidgeon: “The devil is always in the details." Photo / Supplied
Auckland-based property lawyer Joanna Pidgeon said homeowners could find themselves in serious trouble if they tried to meet the $5m threshold by adding an expensive item such as a Lamborghini to their chattels.
“The devil is always in the details, which we haven’t seen yet,” she said, but noted that those who knowingly or recklessly took steps to defeat, evade or circumvent the Overseas Investment Act, which governs foreign ownership of New Zealand houses, risked breaking the law.
She said real estate agents and lawyers could also face “significant penalties as well as professional repercussions” and end up being prosecuted alongside the vendor and purchaser.
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While adding an expensive oven to the chattels list might be allowable as it is an intrinsic part of a property transaction, “adding a boat or an expensive car would likely be artificial” and likely fall foul of the Overseas Investment Act 2005.
“The land would need to be genuinely worth $5 million, not with unrelated extras added to get it over the value threshold,” she said. She also warned sellers not to offer finance schemes to “top up the sale price” or “any other structure designed to get around the legislative parameters”.
Pidgeon said that land was defined in the Land Transfer Act as estates and interests in land, buildings and other permanent structures on land, land covered with water and plants, trees, and timber on or under land.
EpsomTax executive director Garreth Collard said it was a “grey area” and agreed with Pidgeon that there could be legal implications if anyone tried to add an expensive chattel to push their property over the $5m mark.
“If a client asked us about that, we would recommend they don’t do it because it could be potentially dangerous for them,” he said.
“That’s when we would generally say, ‘Go and talk to your lawyer’.”
Former Labour minister Stuart Nash, whose firm Nash Kelly Global helps high net worth foreigners navigate the “golden visa” rules, also told OneRoof that sellers could find themselves in trouble if they tried to get around the $5m rule in a way that was found to be disingenuous.
Stuart Nash: “I wouldn’t make any assumptions that leaving a $100,000 Porsche and $1m of art in the house brings it up to $5m.” Photo / Warren Buckland
Nash had been approached by homeowners about whether it would be “kosher” to throw in some expensive chattels so they could tap into the overseas buyer pool, and his personal view was “don’t do it”.
“I would think if you’ve got a $4m house, but said, ‘I tell you what, there are a couple of Colin McCahons in there that are worth $1m’, I don’t think the courts would look at that favourably and say, yes, that’s a $5m property.”
Others had also asked him about selling a house for $5m and then having a $1m rebate. His view of this was the same, and that it would unlikely stand up to scrutiny in court.
His advice to sellers was to seek advice from the Overseas Investment Office. “I wouldn’t make any assumptions that leaving a $100,000 Porsche and $1m of art in the house brings it up to $5m.”
Queenstown-Lakes is already a property hotspot for foreign buyers. Walker & Co owner Hamish Walker says most of his clients don’t have restrictive budgets. Photo / Getty Images
Ray White agent Ross Hawkins said there would need to besome clear rules around what was and wasn’t allowed when the policy wasreleased.
In his view the value of a property comprised the house,land and chattels, which sometimes included luxury items such as cars or boats.
“Unless they have something actually written in, thenthere’s no reason why you couldn’t do that. Because people might be leaving thecountry and go, ‘Right, I’m going to sell my house and leave my car, so I willsell it with a house’,” he said.
“Sometimes it’s actually a carrot to help people purchasethe property, and it makes it easy for them as they’ve got their mode oftransport as part of the deal.” He once marketed a Sealegs amphibious boat with a house because it was listed as part of the chattels.
Walker & Co director Hamish Walker did not think it would become an issue because buyers often had quite large budgets and were not worried about spending an extra couple of hundred thousand dollars to secure a property.
Many of the overseas buyers he worked with in Queenstown were looking to spend $8m or more on a property, and he was currently negotiating one deal in excess of $10m.
“Many of the foreign buyers I’m dealing with don’t have budgets when buying property.”
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