Housing market shifts as penalties highlight compliance risks
An Auckland couple and their property companies have been ordered to pay almost $1 million in penalties after breaching New Zealand’s foreign buyer ban by concealing overseas buyers’ involvement in property deals.
Real estate agent Jin Ouyang and her husband, Jie Xie, along with Xie’s companies New Life Group and Hermosa Casa, were found to have breached the Overseas Investment Act in relation to three Auckland residential properties.
Judge James Alexander MacGillivray at the Auckland High Court ordered Ouyang to pay $67,500, Xie $157,500, New Life $37,500, and Hermosa Casa $709,100, totalling $971,600, plus $12,478 in legal costs to regulator Toitū Te Whenua Land Information New Zealand, RNZ reported.
A penalty against a third company, Bella Casa, was deferred until next year as its Mission Bay property development is still being completed.
How the breaches occurred
The breaches involved property purchases in Grafton, St Johns, and Mission Bay.
- In January 2019, Ouyang bought a Burton Street apartment on behalf of her mother, who contributed the full $219,500 purchase price. Ouyang admitted she gave effect to the overseas investment without obtaining consent and still owns the property.
- In October 2019, Xie and his Hong Kong-based business partner, Ling Ngai Lok, jointly invested in two residential development blocks. Hermosa Casa acquired a St Johns property after contributions of $416,000 from Lok and $597,700 from Ouyang’s mother, with the balance financed by a bank loan. The property was later sold in 2022 for $3.5m.
- A Mission Bay property was purchased through Bella Casa in June 2020, funded in part by Lok’s $540,000 contribution and a bank loan guaranteed by Xie. Bella Casa still owns this property.
Under the Overseas Investment Act, consent is required for any investment in “sensitive land,” which includes residential property. The couple admitted they had not sought consent.
Judge rejects defence of ignorance
Ouyang’s lawyer, Gregory Thwaite, argued that her knowledge of the law was “problematic,” noting the changes had come into effect only shortly before the 2019 Burton Street purchase and were difficult for a layperson, particularly one without English as a first language, to follow.
However, Judge James MacGillivray ruled that Ouyang’s background and professional training as a real estate agent left little room for excuse.
“I accept the regulator's submission that Ms Ouyang's experience as a real estate agent, her knowledge of the act and her decision not to take legal advice makes her breaches reckless if not intentional,” MacGillivray said.
The judge also ordered Ouyang to dispose of the Burton Street property and Bella Casa to dispose of the Codrington Crescent property by March 31, 2026, RNZ reported.
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