On Wednesday last week (15 August), the Overseas Investment Amendment Bill (Amendment Bill) was passed by Parliament. The new laws are expected to come into force by mid-October 2018.
The Amendment Bill brings "residential land" within the Overseas Investment Act and a general overview of the new residential land provisions is contained in our separate update: New OIO laws bring changes for residential land, forestry and horticulture.
However, the Amendment Bill also brings in changes for the forestry and horticulture sectors, and enhances the enforcement and information gathering powers of the Overseas Investment Office (OIO).
Currently, an overseas person does not need to obtain OIO consent to acquire a profit à prendre – generally described as a right to enter onto another person's land and to take some natural resource, such a mineral deposits, timber, crops or pasture.
This exclusion has meant that forestry rights have not required OIO consent, as they are defined as profits à prendre under the Forestry Rights Registration Act 1993.
The Amendment Bill brings forestry rights into the OIO regime by removing the exclusion for profits à prendre generally. This means that the acquisition of profits à prendre in other sectors, such as horticulture, will also be captured and require OIO consent if the term of the profit à prendre exceeds 3 years.
While the inclusion of forestry rights in the OIO regime is to some extent offset by the introduction of new streamlined tests for forestry investments generally, these are not available for other profits à prendre.
The area threshold for other profits à prendre is also much lower than that for forestry rights – consent for all other profits à prendre will be required if the area of all adjoining profits à prendre held by the investor (and their related parties) is 5 hectares or more.
Profits à prendre already held when the new rules come into force will be included in this calculation, and the calculation does not reset to zero every 12 months (as it does for forestry rights).
The new standing consent regime introduced by the Amendment Act is not currently available for investments in profits à prendre other than forestry rights.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.