The New Zealand Government will allow migrants using the Growth category of its Active Investor Plus (AIP) visa to invest in build-to-rent housing developments through managed funds from December.
But the Government plans to prevent migrants from living in the build-to-rent units they fund, multiple Ministers said on 8 September.
The Government’s AIP rule change will give investors another way to bring capital into New Zealand, while helping support the delivery of new rental housing, Housing Minister Chris Bishop said.
“[Build-to-rent schemes] can add to rental supply over time, while the [Government’s] managed funds [requirement] provides clear safeguards around who manages the investment and how developments are delivered,” Bishop added.
Migrants using the Government’s AIP Growth scheme need to invest NZ$5 million in managed funds, some equities, or convertible note-style products for three years. They can not – currently – invest in non-infrastructure property assets, according to Immigration New Zealand.
Developers plan to build 4,367 build-to-rent units over the next few years, according to the Property Council. They have started construction work on 1,443 units, Property Council data show.
The Government’s latest investor-class rule change comes just months after it gave AIP Growth investors permission to offset capital obligations through charitable donations. Immigration Minister Erica Stanford singalled interest in expanding the range of investments allowed under AIP's Growth category at the time.
Since 1 June, investors have been able to offset AIP Growth obligations by donating to registered charities – including personal and family foundations – that have been operating for at least five years and pay out at least NZ$140,000 per year.
“The question for [the Government] now is how do we broaden out the [AIP Growth] categories of acceptable investments, essentially to soak up all of this capital that is coming our way,” Immigration Minister Erica Stanford told Ryan Bridges Today on 26 May.
“We are going to need to start looking at what other acceptable investments … we add to what, at the moment, is quite a narrow band,” Stanford added.
By Avinash Govind