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A group of Hong Kong-based investors has made nearly $6 million profit on the forced sale of 185 Sandspit Road, just out of Warkworth.
Barfoot & Thompson has confirmed that the 80-hectare property, known as the Chestnut Farm, has been sold to an undisclosed buyer for $10.1 million, $4 million above the capital value (CV 2017).
It is understood the new owner has no immediate plans to develop the land, which is zoned future urban/countryside living, and the agent who handled the sale says more than one offer over $10 million was received.
The property was purchased for $4.48 million in 2012 without Overseas Investment Office (OIO) consent.
On the question of whether the vendors will pay tax on the profit or whether or not a penalty will be imposed, the OIO says it is in discussions with representatives of Hong Zhongliang, Ke Xueli, Gu Xinrong and IRL Investment, but could not release further details.
LINZ deputy chief executive of policy and overseas investment Lisa Barrett says the OIO has been informed that the purchaser is not connected with the original purchasers and does not require OIO consent.
Under Section 48 of the Overseas Investment Act, the OIO can apply to the High Court for an order that a person in breach pay a ‘civil penalty’ to the Crown.
However, the maximum amount of the penalty is $300,000, a pittance compared to the profit made from the sale. NZ First MP Jenny Marcroft says new legislation has been drafted, which she says will stop “this type of behaviour” happening in the future.
“I would expect the OIO to be far more rigorous under this new government,” she says. “These inflated values are essentially locking New Zealanders out of the market.”
