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Forced sale of property brings overseas investors $6 million profit

Newshub logoNewshub 16/11/2018 Vita Molyneux
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The forced sale of an 80-hectare property in Warkworth, north Auckland, has brought a group of Hong Kong foreign investors $6 million. The property was initially purchased in 2012 for $4.48 million, but the investors failed to get consent from the Overseas Investment Office (OIO). They were forced to sell to an undisclosed buyer in June 2018 for $10.1 million, gaining a profit of $6 million for themselves.

Land Information New Zealand Group manager Vanessa Horne says the OIO "is in discussions with the previous overseas owners as to the appropriate course of action given the purchase of the property without consent". 

"We are not in a position to make any further statement about what that action might be at this time." 

According to the OIO, recent amendments to the Overseas Investment Act allow for "civil penalties for breaches of the Act up to three times the quantifiable gain made by the overseas person, or up to $300,000". However, due to the amendments coming into effect on 22 October 2018, they are only applicable for transactions after that time. For breaches of the Act before this date, the High Court can only impose penalties up to the quantifiable gain.

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