The overseas owners of two rural Warkworth properties, north of Auckland, have been ordered to pay $2.95 million to the Crown after an investigation found they were bought without consent.
The High Court ordered the owners to sell the properties and pay penalties, costs and the gain made on the investment.
According to Land Information New Zealand (LINZ), the properties were purchased in 2012 and 2014.
LINZ says: "The overseas owners – Chinese businessmen Zhongliang Hong and Xueli Ke, and IRL Investment Limited and Grand Energetic Company Limited – should have applied to the OIO for consent to buy both properties because they are rural land of more than five hectares.
A statement from LINZ states the two properties illegally bought are:
• 185 Sandspit Road. In January 2014 IRL (ultimately owned by Mr Hong and Mr Ke) bought the land for $4,480,000. On 18 June 2019 the property sold for $10,100,000, following the OIO investigation.
A gain of $2,335,256 was made on the sale after deducting expenses such as legal costs and interest.
• Kourawhero Lodge at 471 Wyllie Road. In July 2012 Mr Hong and Mr Ke bought the lodge for $2,550,000 through an associate. In April 2014 they transferred the land to Grand Energetic Company (ultimately owned by Mr Hong and Mr Ke).
The lodge is due to be settled on 16 September 2019 for $3,250,000. No gain will be made on the sale after deducting expenses.
According to LINZ during the investigation Mr Hong and Mr Ke applied for retrospective consent to buy the properties.
However, the Overseas Investment Office declined to grant consent because the investment did not provide enough benefits to New Zealand under the test to buy rural land.
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