Summer services update
Consultation on the overseas investment fee regime is now complete. The government has considered all feedback and a new schedule of fees and fee framework is being developed.
In summary the proposed fee regime includes:
- a differentiated and transparent fee structure including lodgement, assessment and monitoring compliance fees for most investment pathways
- different fee levels for standard and complex applications.
- a clear objective test for determining complex applications.
Submissions
10 submissions were received on the proposed fee regime. In summary the submissions and responses to submissions were:
Submissions theme - Crown to pay a larger share
The Crown should pay a larger share of the overseas investment regime costs, given the benefits to New Zealand.
Fund the regime through a mix of increased fees and increased Crown funding.
Toitū Te Whenua LINZ response
The Government’s cost recovery policy requires that administration of the overseas investment regime be funded from fees paid by overseas investors who receive significant private benefit from purchasing New Zealand assets.
Submissions theme - higher value transactions to pay higher fees
Consider charging higher fees for higher value investment applications (as used in Australia).
Toitū Te Whenua LINZ response
Cost recovery policy means that application costs should be recovered within the relevant application pathway.
New Zealand receives lower numbers of applications than Australia, including high-value investment applications.
Submissions theme - delay a fee review until after the current legislative reform
Funding review (and new fees) be delayed until the changes introduced by the 2021 Amendment Act are enacted.
Toitū Te Whenua LINZ response
The cost model for the proposed new fee structure is based on applications and activities data for 2019/20.
The annual operating deficit for the overseas investment regime means a further delay would likely increase the deficit.
Submissions theme - defining ‘complex’ and ‘standard’ within the differentiated fee structure
Disagreement with the introduction of standard and complex application fees.
A complex fee will act as a disincentive to investors and will be difficult to transparently and fairly administer.
Toitū Te Whenua LINZ response
LINZ has developed a test to determine how applications will be assessed for fee purposes. An objective test to determine complex applications will form part of the amended fees regulations.
Submissions theme - charging a monitoring compliance fee
No fee for monitoring compliance with consent conditions. The initial lodgement fee for quality assurance be split into standard and complex rates.
Toitū Te Whenua LINZ response
A monitoring compliance fee is needed to recover the costs of this activity. While consent holders may not directly benefit from monitoring compliance, it is important that conditions of consent are monitored to ensure integrity of the overseas investment regulatory regime.
Submissions theme - negative impact on businesses
New and increased fees could have a negative impact on business. Increased fees may deter investment, particularly investments in sensitive land and fishing quota.
Toitū Te Whenua LINZ response
The introduction of a new fee structure and updated fees is unlikely to have a material or significant impact on the majority of applicants.
Some fee levels will be reduced in the amended fees regulations.
Next steps
The Cabinet Legislation Committee will consider the regulations for the proposed fee schedule and framework in early August.