Australian citizens are exempt from this rule as they are considered New Zealand residents per the Trans-Tasman Travel Arrangement.

Clause 11 of the Act allows overseas persons to purchase residential land if it is used to increase the supply of housing in New Zealand.

[6] The Overseas Investment Amendment Act 2018 was the result of an acute housing shortage in New Zealand during the early 21st century.

In addition, national housing prices rose faster than incomes, with the gap rising from over 3.0 in January 2002 to 6.27 in March 2017.

[7] In 2017, a report by the International Monetary Fund ranked New Zealand as the most unaffordable country in the OECD and recommended the taxation of property speculation.

[12] Following the 2017 general election held on 23 September 2017, none of the parties in the New Zealand House of Representatives had enough seats to govern alone.

[13][14] On 14 December, the Overseas Investment Amendment Bill was introduced by Labour Member of Parliament David Parker.