How to Buy Property in New Zealand as a Foreigner
Who can buy property in New Zealand?
Generally, only residents and citizens can purchase residential property in New Zealand, but there are some exceptions. If you hold a residence class visa but are not yet considered "ordinarily resident," you can buy or build one home, provided you obtain consent from the Overseas Investment Office before the purchase.
Overseas investors must obtain government approval under the Overseas Investment Act 2005 and the Overseas Investment Regulations 2005 when acquiring residential land or any other significant business assets (including shares in a New Zealand company). However, Australian and Singaporean nationals and corporate investors are exempt from these consent requirements for residential land.
To be considered ordinarily resident in New Zealand, a person must have lived in the country for at least 12 months, been physically present for at least 183 days within those 12 months, hold a New Zealand residence class visa (or be a citizen or permanent resident of Australia or Singapore), and be a New Zealand tax resident.
Do the research
Investing in New Zealand real estate offers several benefits. The country has a stable and growing economy, which supports a resilient property market. New Zealand's high quality of life, excellent healthcare, and education systems make it an attractive place to live, driving demand for housing. The natural beauty of the country, from stunning beaches to scenic mountains, also draws both residents and tourists, boosting the rental and vacation property markets. The legal framework for property ownership in New Zealand is transparent and secure, providing confidence to investors. Additionally, the country’s limited land supply, particularly in popular cities like Auckland and Wellington, contributes to steady property value appreciation, making it a promising long-term investment.
Below are some sought-after destinations for real estate investment in New Zealand:
- Auckland - As the largest city in New Zealand, Auckland is a prime location for both residential and commercial real estate. Key areas such as the Central Business District (CBD), Ponsonby, and Devonport are particularly popular due to their vibrant lifestyle, modern amenities, and excellent connectivity.
- Wellington - The capital city offers a dynamic mix of urban living and natural beauty. Neighborhoods like Thorndon, Kelburn, and Mount Victoria are highly sought after for their blend of cultural attractions, government offices, and stunning harbor views.
- Queenstown - Renowned for its breathtaking landscapes and outdoor activities, Queenstown is a top destination for luxury real estate and vacation homes. Areas like Arrowtown and Lake Hayes are especially popular for their exclusive properties and proximity to ski resorts.
- Christchurch - This city, known for its resilience and innovation, offers a growing real estate market. Suburbs like Merivale, Fendalton, and Sumner attract buyers with their blend of historical charm and modern amenities, making them appealing for both permanent residences and investments.
- Bay of Plenty - Located on the North Island, this region is favored for its beautiful beaches and relaxed lifestyle. Towns like Tauranga and Mount Maunganui are popular for both holiday homes and retirement properties, offering a mix of coastal living and community amenities.
Where to find properties online:
Financing
In New Zealand, foreign real estate investors have several borrowing options available to them. These include traditional bank mortgages, loans from non-bank lenders, and specialized investment loans. Each option differs in loan-to-value ratios, interest rates, and repayment terms, offering a variety of choices to suit different investment strategies and financial situations.
Due Diligence and Sales Contract
In New Zealand, it is common to conduct a relatively limited due diligence process before entering into a contract. The contract will then outline more detailed conditions that both parties must satisfy before the agreement becomes unconditional and settlement occurs. Once these conditions are met, the written agreements become legally binding.
In New Zealand, the property purchase agreement is a mandatory legally binding contract that details the terms and conditions of the property sale between the buyer and the seller. It serves as a formal record of the transaction and is essential for transferring property ownership. Non-residents should also be mindful of any legal or financial implications in their home country and may need to provide additional documentation to complete the transaction.
What are the costs like when purchasing a property in New Zealand?
| Transaction Costs | Rate | Who Pays |
| Property Transfer Tax | 0.00% | |
| Notary Fees | 0.10% - 0.40% | buyer |
| Legal Fees | 1.50% | buyer |
| Real Estate Agent Fee | 3.50% - 4.00% (+15% GST) | seller |
| Costs Paid by Buyer | 1.60% - 1.90% | |
| Costs Paid by Seller | 3.50% - 4.00% (+15% GST) | |
| Total Roundtrip Cost | 5.10% - 5.90% | |
| Source: Global Property Guide, PWC, Deloitte | ||
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:
The registration fee is NZD80 (US$53) for every transfer of property.
Conveyancer Fee
The conveyancer fee is NZD1,500 (US$1,000) 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 15% GST of the purchase price. It is typically paid by the seller.