The Attorney-General has reported that the Land Transfer (Foreign Ownership of Land Register) Amendment Bill appears to be inconsistent with the right to be free from discrimination affirmed in section 19(1) of the New Zealand Bill of Rights Act 1990.
The private member's bill was introduced by New Zealand First MP Mahesh Bindra.
In a report to the House of Representatives on the bill, Attorney-General Christopher Finlayson says it draws a distinction based on a person's citizenship.
Clause 4 requires overseas persons to provide information about their nationality for the purposes of the register. "Overseas persons" are defined as individuals who are "neither a New Zealand citizen nor ordinarily resident in New Zealand".
The bill therefore draws a distinction based on a person's citizenship. Though there are also residency requirements built into the test, whether a person is ordinarily resident is immaterial if they hold New Zealand citizenship.
"A non-New Zealand citizen and a New Zealand citizen both resident in New Zealand would not be subject to the proposed register. However, if they were both to become resident overseas only the non-New Zealand citizen would have to submit to the register," he says.
The report says the bill appears to create a material disadvantage for non-New Zealand citizens because overseas persons are required to provide more information when presenting an instrument for registration than New Zealand citizens who are not resident in New Zealand.
The bill also proposes a public register, which would require the land owner caught by it to make public their name, their country of origin and the value of their land purchase in New Zealand.
"The loss of privacy in publicising this information is sufficient to constitute a material disadvantage," Mr Finlayson says.
Mr Finlayson says he does not consider that the extent of the discrimination and the availability of reasonable alternatives can be justified under section 5 of the Bill of Rights Act.
There are reasonable alternatives available to achieve the bill's objective of providing a comprehensive view of the total stock of foreign ownership of land in New Zealand.
Mr Finlayson says the impact of the loss of privacy for foreign nationals not ordinarily resident in New Zealand goes beyond losing the ability to keep personal investment transactions from public view.
"Publication of their name in many cases will be enough to expose the means of contacting them through social media and expose them to stigma and hostility from persons who resent foreign ownership."