My Account
The forced sale of an 80-hectare property on Sandspit Road, known as the Chestnut Farm, has been confirmed.
Former owners – Hong Zhongliang, Ke Xueli, Gu Xinrong and IRL Investment Limited – bought the property in 2012 without Overseas Investment Office (OIO) consent.
Although they applied retrospectively for approval, consent was denied and the property went on the market last year.
OIO policy and overseas investment chief executive Lisa Barrett says the OIO is now in discussions with the overseas vendors.
The OIO has the power to apply to the High Court for an order that a person in breach pay a ‘civil penalty’. The maximum amount of the penalty is the larger of $300,000 or the amount of any gain, such as the increase in the value of the property since acquisition.
Just this month, the former owners of a Glendowie property, in Auckland, were ordered to pay $847,000 and costs for failing to get consent under the Overseas Investment Office Act before buying the property.
“The judgment establishes that where an overseas person stands to make gain from buying sensitive land without consent, any penalty imposed will focus on the gain they make by failing to follow the overseas investment rules,” Ms Barrett says.
In regard to the Sandspit Road property, an OIO spokesperson says they will not comment further until discussions with the vendors are concluded.
The property is zoned future urban/countryside living and its rateable value as at July 1 last year was just over $6 million. It was sold to the Chinese investors in 2012 for $4,480,000.
