If you’re a foreigner with $10 million to invest in our country for 5 years you can buy New Zealand Residency. It’s called the “Golden Visa ” programme.
It’s a deeply flawed scheme because Golden Visa purchasers do not have to start a business or invest in an existing New Zealand one, they can simply buy bonds, equities, enter managed funds, or buy into property development, and the research shows that’s very largely what they do.
Moreover, like most wealthy people they find ways of paying very litte tax so, all in all, it isn’t the best way to grow our economy, which Luxon and Willis insist they are intent on doing.
Not only do Golden Visas fail to stimulate an economy, they also facilitate crime.
The UK and Ireland ,for example, dropped Golden Visas because of money laundering. The Netherlands stopped them because it didn’t deliver expected returns to their economy. Portugal and Spain stopped Golden Visa property buying options due to rising house prices.
But, as from yesterday, our right- wing coalition government has declared they will allow Golden Visa holders to buy or build one home worth at least $5 million.
This is a tried and true way of pushing up house prices and creating more homelessness.
How so?
Because, as Urban Geographer Professor Ley at Colombia University in Canada explained to me in the above clip from my documentary Who Owns New Zeland Now? (which I made near the end of the John Key era )… it’s called “ The Ripple Effect” and here’s how it works.
When a wealthy foreign buyer pushes in at the top of the market it forces local buyers, who would have bought at the top of the market, out one level, and they in turn push buyers with less money out to the next level again and so on.
Eventually there comes a point when house prices have boomed so much that landlords decide to cash up and evict tenants who then can’t find an affordable place to live and become homeless.
As I say, that’s what happened under the John Key government, which is when I made my documentary Who Owns New Zealand Now?
Please watch the Prof. Ley clip from it. (I will post the whole documentary tomorrow).
Allowing rich foreigners to buy top end residential properties is a really stupid idea.
The government don’t expect most Golden Visa holders to settle here and improve our economy as the Coalition would have us believe. If proof be need that this is so- just read the regulations!
Golden Visa holders do not have to speak English and on one class of the Golden Visa they only have to be in our country for a minimum of 21 days over 3 years while on another it’s just 105 days over 5 years.
In short, it’s a free pass to foreigners to exploit our housing market and push up house prices.
We’ve been here before, and Luxon and Willis and Seymour and Peters have learned nothing from the disastrous John Key era.
Oh.. wait.
They all own properties … so a strategy to deliberately raise house prices will allow them to make more untaxed profit, as Luxon did 9 months ago when he creamed $500K of untaxed profit from the sale of two properties .
Brilliant.
PS. There might be one exception to the Coalition of the stupid. I didn’t see Housing Minister Chris Bishop at the announcement of the $5 million Golden Visa property deal. I wonder why? Could it be it’s because he is on record as saying he wants to lower house prices not raise them ro encourage people invest in other areas of our economy? Now, there’s a radical idea!
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