Nathan Guy says he granted American billionaire and Donald Trump campaign donor Peter Thiel citizenship on the advice of officials, but cannot remember doing it.

Photo: AFP

The Department of Internal Affairs (DIA) today revealed it approved Mr Thiel's application on 30 June, 2011 - about five years after he bought a house in Auckland.

Mr Thiel, who co-founded Paypal and was one of the first investors in Facebook, has since bought and sold other properties here.

The Labour Party has demanded the government explain if it allowed the San Francisco venture capitalist to jump the citizenship queue. Normally someone had to spend more than 70 percent of their time in New Zealand over five years before they could apply, it said.

Mr Guy, who was the internal affairs minister at the time, said Mr Thiel was granted citizenship under a provision of the Citizenship Act that stated it would be "in the public interest due to exceptional circumstances of a humanitarian or other nature".

However, he said he did not recall dealing with Mr Thiel's application.

"As minister I tended to follow the advice of DIA officials on these issues; I'm advised officials recommended granting citizenship in this particular case."

Internal Affairs said in a statement it did not usually discuss individual citizenship details, but "there is sufficient public interest in Mr Peter Thiel to warrant comment".

It would respond to further questions about Mr Thiel under Official Information Act (OIA) guidelines, which give departments a deadline of up to 20 working days to respond.

The OIA says information should be released unless there is good reason to withhold it.

In its statement, Internal Affairs outlined its usual eligibility criteria including that an applicant must intend to live in New Zealand if they were granted citizenship and have spent at least 240 days in the country in each of the five years leading up to their application.

Peter Thiel owns property in Auckland and Wanaka

Mr Thiel, 49, recently bought a multi-million-dollar lakefront estate in Wanaka.

As a New Zealand citizen, he did not face Overseas Investment Office regulatory hurdles, which can be time consuming for foreign property buyers.

The boutique Auckland real estate firm Graham Wall has helped Mr Thiel buy property in New Zealand as far back as 2006, when he bought a house in Parnell.

A partner in the firm, Ollie Wall, said Mr Thiel told him he was attracted to New Zealand because it had a secure water supply and the ocean protected its borders.

He said Mr Thiel encouraged his friends to invest here.

"What I love about it is a lot of the people moving here are young tech entrepreneurs, such as Peter Thiel, but not just in the tech industry, but a lot of young, really smart people who are, quite literally, changing the world are moving here.

"So it creates huge opportunities for a lot of people I think," Mr Wall said.

Labour spokesperson Iain Lees-Galloway said Mr Thiel's investment in two New Zealand tech ventures should be applauded, "but it is not enough reason to give him preferential treatment".

"There may well be an innocent explanation, but the longer the government stays silent the more it appears they have something to hide."

Last year, Mr Thiel bankrolled a lawsuit by ex-wrestler Hulk Hogan. It led to $US140m in damages being awarded against the media group Gawker, which filed for bankruptcy.

Mr Thiel said Gawker had repeatedly violated people's privacy, including his own.