Who is a country entitled to refuse as a buyer of land?

Suppose you own a field and a foreigner offers you more for it than anyone else will. A surprising number of rich countries will not let you accept. Denmark requires permission from its justice ministry for most buyers who have not lived there, a power it holds because it wrote a protocol into the European treaties keeping rules the rest of the single market gave up.¹ Switzerland requires authorisation for anyone domiciled abroad and rations holiday homes by national quota.² New Zealand banned most overseas buyers of existing homes in 2018.³ Canada forbids most non-Canadians from buying a house inside a city and permits the same purchase in the countryside.⁴ Nearly all of this is defended with one word, affordability, and the shapes of the rules do not match the defence. Three justifications are in play and they are not the same argument: price, security, and membership. Each implies a different way of writing a rule, which makes all three testable against the rules governments write.

Take price first, because it is the public reason. The effects are real and smaller than the rhetoric. Before its ban New Zealand was transferring roughly 2 to 3 per cent of homes to overseas buyers, rising to about 22 per cent in central Auckland.⁵ The ban worked as plumbing: such transfers fell 81 per cent in the March 2019 quarter against a year earlier, and by the June quarter stood at 0.5 per cent against 2.8 per cent.⁶ British Columbia's foreign buyer tax cut the foreign share of purchases from 13.2 to 1.7 per cent in three months, and a study using those buyer counts found prices fell about six per cent further where foreign buyers had been concentrated, though nowhere near enough to fix Vancouver's affordability; other estimates put the short-run effect at four to six per cent, with prices back above their pre-tax level within months.⁷⁸

Grant the effect and ask who pays for it. Land in a given place is close to fixed in supply, so its price is set by what the keenest bidder will give. Remove a class of bidders and the price falls, so the cost falls on the current owner, who no longer receives the best offer, and the benefit goes to the next resident buyer, who faces one fewer rival. A foreign buyer restriction is a transfer between residents, from those who hold land to those who hope to, and in practice from older households to younger ones. That may be a transfer worth making. It is not what the policy is advertised as doing.

Security is a genuine interest and a poor fit for these rules. What a country might reasonably want controlled is land that does something strategic: farmland, water, coastline, ground beside a port or a base. That interest is keyed to the function of a parcel rather than to the nationality of whoever sleeps in a flat, and both Switzerland and New Zealand already run separate consent regimes for such land, New Zealand's reaching farmland and fishing quota.²⁹ Canada supplies the reductio. Its prohibition covers residential buildings of three units or fewer inside a census metropolitan area and leaves everything outside alone.⁴ It forbids the apartment and permits the field.

Which leaves membership, and membership predicts the rules. Denmark's question is not nationality but residence: a buyer who has lived in the country long enough, five years by the usual account, is treated as a domestic buyer, and permission where required attaches to a particular property rather than to a person.¹¹⁰ Switzerland largely exempts foreigners who live there and rations those who do not, and a resident from outside the EU may buy a home they will occupy themselves without approval.² New Zealand exempts Australians and Singaporeans by treaty.³ In each case the variable is not where the buyer was born but whether the buyer will be standing in the weather when the consequences arrive.

That is a claim about what owning land is. A landowner acquires more than a right to occupy. Owning a parcel confers standing in the decisions a community makes about itself: a right to be heard on a zoning change, to be compensated if the land is taken, to resist a coastal retreat line that would write the plot off. Those are claims on collective decisions, and an owner who will never live under them acquires the claim without the exposure. Michael Walzer gave this worry a name. A blocked exchange, in his argument, is a transaction a community refuses to permit because letting money buy the good would let wealth convert into power in a sphere where it does not belong; his list runs to political office and votes.¹¹ He did not discuss land, and the extension is mine. But land is the best case for his thesis, because it is the only asset whose value is produced by decisions its owner thereby acquires a right to contest.

If membership is the ground, the rules sort cleanly, and not in the direction most of them run. A residence test is justified and a nationality test is not, which makes Canada's statute wrong on its own terms: it exempts a citizen who has lived abroad for thirty years while attaching conditions to a work-permit holder who has filed taxes and will live under every by-law the council passes.⁴¹² And the instrument now spreading fastest is the one this ground forbids. New Zealand's Overseas Investment (National Interest Test and Other Matters) Amendment Act 2025, in force since 6 March 2026, lets holders of certain investor visas buy residential land above a threshold its land regulator describes as five million dollars.⁹ On affordability grounds that is coherent, and it is the only one of these regimes that is. On membership grounds it sells standing, and prints the price in the statute.

Two objections are serious. The first is that membership is hostility to foreigners in a better coat. But the ground is falsifiable: it demands that a resident foreigner be treated better than an absent citizen, which is the opposite of what such hostility wants. The second is stronger. If the worry is an owner who does not bear local consequences, price the consequence: tax the vacancy, charge non-resident rates, attach a covenant about use, and leave the sale alone. Where the harm genuinely is an empty house, that is right and a ban is lazy. It does not reach the harder case, because a covenant can price a vacancy and cannot price standing, standing being what allows its holder to contest the rule that would price it.

So the answer is narrower than most governments want and wider than their critics allow. A country may refuse a buyer who will not live under the decisions its land is subject to; it should write that test in terms of residence rather than passports, and say plainly that the cost falls on its own landowners. It should not sell exceptions. If this account is right, the price threshold will not hold its level, because a threshold defended on affordability grounds has no principled floor. New Zealand's figure is the one to watch.

Notes

1Protocol on the acquisition of property in Denmark, annexed to the Treaty on European Union and now Protocol No 32 to the consolidated treaties, for the provision that notwithstanding the provisions of this Treaty, Denmark may maintain the existing legislation on the acquisition of second homes, and for the absence of any sunset clause. The protocol text was not opened directly; the quoted clause and its treaty placement were returned in search results quoting the Wikisource transcription and the EUR-Lex summary. Protocol text at Wikisource and EUR-Lex summary on purchasing property in other EU countries

2Federal Act on the Acquisition of Real Estate by Persons Abroad of 1983, known as the Lex Koller, for the requirement that any acquisition of real estate by a person domiciled abroad be subject to administrative authorisation, for the exemption of EU and EFTA nationals resident in Switzerland, for the permission given to a third-country resident buying a home he will himself occupy, and for the national quota of roughly 1,500 holiday-home permits a year. A tightening was put out for consultation by the Federal Council in April 2026 and had not been enacted at the time of writing, so the regime described here is the one in force. Lex Koller overview, PwC Switzerland on the proposed tightening and Deloitte Switzerland on the same consultation

3Overseas Investment Amendment Act 2018 (New Zealand), for the redesignation of residential land as sensitive land requiring consent from the Overseas Investment Office, for the resulting prohibition on most overseas persons buying existing homes, and for the exemption of Australian and Singaporean citizens under trade agreements. The then prime minister's framing of home ownership for overseas buyers as a privilege rather than a right is reported in the NPR piece. Account of the 2018 Act and NPR report on its passage

4Prohibition on the Purchase of Residential Property by Non-Canadians Act, in force from 1 January 2023, for the coverage of residential buildings of three dwelling units or fewer located inside a census metropolitan area or census agglomeration, for the exclusion of property outside those areas, and for the two-year extension announced on 4 February 2024 moving expiry to 1 January 2027. Whether the expiry has since been extended again could not be confirmed from reachable sources. Bennett Jones on the extension and McInnes Cooper on the Act's scope

5For the pre-ban share of New Zealand home transfers involving an overseas buyer, reported at about 3 per cent nationally in 2018 and elsewhere as 2 to 3.5 per cent, and for the regional concentration of about 22 per cent in central Auckland and 5 per cent in the Queenstown region. The underlying Statistics New Zealand property transfer series was not opened; these figures come from contemporaneous reporting of it. NPR, for the national share and New Zealand Herald reporting on the regional shares

6Statistics New Zealand property transfer statistics, for the 81 per cent fall in home transfers to people without New Zealand citizenship or a resident visa in the March 2019 quarter against the same quarter a year earlier, for the June 2019 quarter figure of 0.5 per cent of transfers against 2.8 per cent a year earlier, and for the agency's own caution that exemptions meant the figure would never reach zero and that purchases through trusts were not captured. interest.co.nz report of the Statistics New Zealand release and Stuff report on the same series

7University of British Columbia Sauder School of Business summary of research by Tom Davidoff and Yan Zheng using transaction-level buyer counts, for the fall in the foreign share of Vancouver purchases from 13.2 to 1.7 per cent within three months of the 2016 foreign buyer tax, for prices declining about six per cent more in neighbourhoods with more foreign buyers, for the authors' statement that the difference was not large enough to resolve Vancouver's affordability problem, and for their attribution of much of the high-end decline to rising interest rates and an economic slowdown rather than to the tax. UBC Sauder summary

8For the short-run price effect of foreign buyer taxes estimated at approximately 4 to 6 per cent, and for the finding that Vancouver house prices began rebounding in February 2017 and soon exceeded pre-tax levels. Neither paper was opened; both estimates were returned in search results quoting them, and they are reported here as two independent estimates rather than as one agreed figure. Memorial University working paper WP202608 on foreign buyer taxes and single-family home prices and Hu, Li and Xu, Foreign buyer taxes and house prices in Canada: a tale of two cities, Regional Science and Urban Economics

9Overseas Investment (National Interest Test and Other Matters) Amendment Act 2025 (New Zealand), for the new consent pathway allowing holders of Active Investor Plus, Investor 1 and Investor 2 visas to acquire residential land that is not otherwise sensitive, for the land regulator's description of it as a five-million-dollar home pathway, for the retention of separate consent requirements for farmland and fishing quota, and for commencement on 6 March 2026 by Order in Council rather than the 1 May 2026 statutory backstop. Earlier commentary predicting an early-2026 start is superseded by that date. The Act on the New Zealand legislation site, Land Information New Zealand on the reform and the five-million-dollar pathway, the Treasury information release and Bell Gully on the residential land pathway

10Danish Acquisition of Real Property Act, for the requirement of permission from the Ministry of Justice for buyers without Danish domicile, for the treatment of a buyer with at least five years of prior residence as satisfying the domicile condition, for the administration of applications by the Department of Civil Affairs, and for the stricter treatment of summer houses, which generally require specific permission even for EU nationals. Sources differ on whether the five years must be consecutive or merely total, which matters for anyone with interrupted residence, and the statute itself was not opened. Danish Department of Civil Affairs guidance on acquisition of real property, Hjulmand Kaptain on buying a summer house and Nordic Institute of European Legal Studies on the EU law of the sommerhus

11Michael Walzer, Spheres of Justice: A Defence of Pluralism and Equality (Basic Books, 1983), for the concept of a blocked exchange, for the argument that blocking conversions between spheres is what prevents wealth becoming dominance, and for the inclusion of political office, votes and exemptions from communally imposed duties on his list. The book itself was not opened; the account here rests on the hosted copy of its first three chapters and on summaries of the blocked-exchange list. Walzer does not discuss foreign ownership of land, and the application made in this paper is not his. Hosted copy of chapters 1 to 3 and an overview of the book and its argument

12For the exemptions under Canada's prohibition: permanent residents are treated as Canadians and face no restriction, while work-permit holders must satisfy conditions on remaining validity of the permit, tax filing and the number of properties owned, and international students face tighter conditions still. Sources disagree on the precise tax-filing test for work-permit holders and on whether a price cap applies to students, so only the structural asymmetry relied on in the argument is asserted here. WealthNorth summary of the exemptions and the January 2027 expiry and HGR Graham Partners guide to the ban