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May 05, 2014

Buying costs are relatively low in New Zealand


How high are realtors’ and lawyers’ fees in New Zealand? What about other property purchase costs?

Transaction Costs

Who Pays?
Registration Fee NZD80 (US$70) buyer
Conveyancer Fee NZD1,500 (US$1,304) buyer
Real Estate Agent´s Fee 3.5% - 4% (+ 12.5% GST) seller
Costs paid by buyer 0.21% - 0.74%
Costs paid by seller 4.04% - 5.00%
ROUNDTRIP TRANSACTION COSTS 4.25% - 5.74%
See Footnotes
Source: Global Property Guide

New Zealand house propertiesHow difficult is the property purchase process in New Zealand?

Nonresidents are allowed to buy a house in New Zealand. It should be noted, however, that the purchase of property does not give the buyer any right to live permanently in New Zealand.

If the investment involves less than NZ$10 million (US$8,695,652), no official clearance is needed; otherwise, authorization from the Overseas Investment Office is required if a non-resident wants to acquire sensitive areas such as agricultural land exceeding 5 hectares in area, or exceeding NZ$10 million (US$8,695,652) in value. Authorization is also needed for the acquisition of islands, or land containing or adjoining reserves or heritage areas, and foreshores or lakes in excess of 0.4 hectares.

When buying property, the following steps should be followed:


  1. The seller must obtain a Land Information Memorandum (LIM) from the local authorities, which provides information on the legality of the building to be acquired such as special land features, stormwater and sewerage, rates owing on the land, future plans to the area where the property is found such as zoning plans, and use of the land. Securing a LIM may take as much as 10 days.
  2. The seller must register the title through Land Information New Zealand. The seller has two options: submit the title online (with the conveyancer/lawyer acting as the registrar), or through manual registration by submitting the title and needed documentation one of the Land Titles Office.
  3. The conveyancer must then double-check all the documents before registering. Documentation includes personal identification for both parties, written authority for the conveyancer to register the property, and the signed transfer of property.



Footnotes to Transaction Costs Table


The round trip transaction costs include all costs of buying and then re-selling a property – lawyers’ fees, notaries’ fees, registration fees, taxes, agents’ fees, etc.

Registration Fee:
Registration fee is NZD80 (US$70) for every transfer of property.

Conveyancer Fee
Conveyancer fee is NZD1,500 (US$1,304) for every transfer of property.

Real Estate Agent´s Fee:
The real estate agent´s commission is negotiable, ranging from 3.5% to 4%, plus 12.5% GST of purchase price. It is typically paid by the seller.






Comments

#1 JAMES LIVINGSTON | March 01, 2013

Great info.

My company is interested in purchasing up to 100 rental properties in the Auckland region.
These would be preferably in the lower end of the market. Any advice from readers??

#2 JIMMY | April 15, 2013

yeah... go buy 100 rentals in your own country

#3 DAN PONG | September 29, 2013

definitely able and keen to help you, how do i get in touch with you though? @James Livingston

#4 ALEX SINTON | June 26, 2014

GST (Goods and Services Tax) is now 15%

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