1Calculation of total term of interest in land

1. The total term of an interest in land is the duration of—

2. either—
   1. the term of the interest acquired; or
   2. in the case of an interest that is part-way through its current term, the remainder of any current term of the interest as at the time the overseas investment transaction is entered into; and
3. any rights of renewal of that interest (whether of the grantor or grantee); and
4. any previous interest that relates to the same or substantially the same land; and
5. if a previous interest was separated in time by a periodic interest, that periodic interest.

Example

An overseas person was a tenant of a lease of sensitive land for a term of 9 years with no rights of renewal. At the end of that lease, the parties enter into a 2-year extension.

The total term of the interest is 11 years: 2 years’ extension plus 9 years under the previous lease. The acquisition of the extension is an overseas investment in sensitive land, and consent is required.

6. A previous interest, in relation to an interest in land, is an estate (other than a freehold estate) or interest in land that—

7. was held by—
   1. the overseas person or an associate of the overseas person; or
   2. a person in which the overseas person or their associate (either alone or together with its associates) had a more than 25% ownership or control interest; and
8. was consecutive in time to the relevant interest or to another previous interest of the relevant interest.

9. The duration of a previous interest before the overseas person or their associate had a more than 25% ownership or control interest in the person who held that previous interest must be disregarded from the calculation of the total term.

   Example

   A tenant has a lease of land for a term of 10 years. In year 6 of the lease, an overseas person increases their ownership interest in the tenant from 15% interest to 30%. At the end of the lease, the tenant enters into a new lease of the same land for a 5-year term.

   The total term of the interest is 9 years: 5 years in the new lease plus 4 years of the previous lease from the point that the overseas person invested in the tenant. The acquisition of the new lease is not an overseas investment in sensitive land.

10. In this clause,—

    consecutive includes separated by—

    1. any periodic interest; or
    2. a period of less than 4 months

    Example

    An overseas person was a tenant under a lease of sensitive land for 5 years. The tenant held over after the lease expired. No consent is required for that periodic lease (see clause 2 of Schedule 3).

    After a year of holding over, the tenant enters into a new lease with the landlord for another 5 years.

    The new lease is the acquisition of an interest in land. The total term of the interest is 11 years: 5 years in the new lease, 1 year of holding over, and 5 years under the previous lease. The acquisition of the new lease is an overseas investment in sensitive land, and consent is required.