Buying Property in New Zealand – What You Must Know

New Zealand property rules for aussies

The process of buying property in New Zealand is highly regulated, especially for those who are not citizens or 'ordinarily resident'.

• Residential land statement: Australian citizens and permanent residents who are 'ordinarily resident' in NZ are generally treated similarly to New Zealand citizens when purchasing residential land.

• Overseas Investment Act (OIA): This key piece of legislation restricts the purchase of residential land (including properties with dwellings) by 'overseas persons'.

• Who is an 'Overseas Person'? An Australian who is not 'ordinarily resident' in New Zealand is considered an 'overseas person' under the OIA. This means they cannot purchase existing residential property without consent from the Overseas Investment Office (OIO).

• Strict consent rules: OIO consent is challenging to obtain for existing homes, often requiring the buyer to commit to immediately building new dwellings or increasing housing supply.

• Exemptions exist: There are certain exemptions, primarily relating to newly built homes in large developments or non-residential land.

Even if you secure a property, obtaining the optimal financing structure from Australian or New Zealand lenders is critical. Platforms like HeyNest connect you with independent brokers who can clarify how your Australian financial profile impacts international lending, ensuring you meet all compliance requirements from the start.

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Financing your property purchase in NZ

Securing the necessary funds is perhaps the most critical step after finding a property, whether you're purchasing in Auckland, Queenstown, or elsewhere.

• Australian bank branches: Some Australian banks have operations in New Zealand and may offer cross-border lending, but often with stringent conditions.

• NZ local lenders: New Zealand banks will consider non-resident income, but they typically apply lower Loan-to-Value Ratios (LVRs) and higher interest rates due to perceived risk.

• LVR requirements: Expect to need a much larger deposit than you would for a primary residence in Australia. Non-resident LVRs can often be limited to 50% or 60% of the property's value.

• Income assessment: Lenders rigorously assess foreign income and exchange rate volatility, which can reduce your borrowing capacity.

• Using australian equity: A common strategy is to leverage the equity in your existing Australian property to fund the NZ deposit, rather than moving cash internationally.

The lending landscape is complex and constantly changing. To secure the most favorable terms for your cross-border investment, you need an expert who understands both Australian equity release and New Zealand lending criteria. HeyNest's network includes brokers who specialize in diverse financial profiles, helping you compare options across multiple lenders to build a robust financial bridge to your NZ property.

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Key steps in the NZ buying process

If you've confirmed your eligibility under the OIA and secured pre-approval for finance, the actual purchase process follows a structured path.

• Get a lawyer/conveyancer: Essential for due diligence and managing the transaction in line with NZ law.

• Make an offer: This is typically done through a sale and purchase agreement.

• Due diligence: Conduct essential checks, including a building report and a Land Information Memorandum (LIM) report, which details everything the local council knows about the property and land.

• Secure final finance: Once the offer is accepted and due diligence is complete, your lender provides final, unconditional approval.

• Settlement: On settlement day, the outstanding funds are paid and the transfer of ownership is registered with Land Information New Zealand (LINZ).

• Key consideration: The entire process requires synchronizing legal, financial and regulatory timelines, which can be challenging from abroad.

To avoid delays and unexpected costs, ensure your finance is rock-solid and managed by a professional. A broker connected through HeyNest acts as your financial project manager, coordinating with your New Zealand lawyer and multiple lenders to ensure a seamless, stress-free path to settlement, providing you with clarity and confidence every step of the way.

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Frequently asked questions

Can an Australian buy a house in New Zealand without moving there?

Yes, but only by obtaining consent from the Overseas Investment Office (OIO), which is generally difficult for existing homes unless you meet specific criteria (e.g., building new dwellings).

What is a LIM report in the context of buying property New Zealand?

A Land Information Memorandum (LIM) is a report issued by the local council providing property-specific information, like building permits, rates and hazard advice.

Is stamp duty applicable when buying property New Zealand?

No, New Zealand does not have stamp duty, but you may be subject to the bright-line test (a form of capital gains tax on residential property sold within a certain period).