Top considerations for buying a property overseas in New Zealand
Have you visited New Zealand and absolutely fallen in love with it? Then you might be thinking about investing in some real estate there. Unfortunately, recent changes in the laws of the country created restrictions on your ability to purchase property as a foreigner in New Zealand.
Understanding these new rules will give you the chance to figure out what you can and can’t do if your dream is to have a house of your own in this unique country. We’ve compiled some information below to help you start sorting out the important details.
What properties are available for purchase in New Zealand?
The Overseas Investment Amendment Bill went into effect in 2018, and it has placed restrictions on the types of properties that foreigners can purchase in New Zealand.
However, if you prove that you live permanently in the country, you will not face the same restrictions that foreigners living abroad will face. This means that you will be able to find single-family homes and apartments, which can serve as smart investments because the real estate market has been growing. And if you can’t find the perfect home, you will also be able to purchase land that you can use to build your dream house instead.
New Zealand is beautiful all around, but some of the most desirable properties are located in:
- Wellington
- Christchurch
- Auckland
Are there any restrictions for foreign property buyers in New Zealand?
As of October 2018, foreigners are restricted from purchasing property in New Zealand. These rules were set in place to help keep housing prices from soaring, and to help resolve housing shortage problems.
The good news is that these restrictions don’t apply to all people:
- If you are a citizen of New Zealand, you can buy real estate in the country whenever you want.
- If you have been a permanent resident in New Zealand for a minimum of one year, you’re a tax resident, and you’ve been in the country for a minimum of 183 days, you don’t have any restrictions on the real estate that you can invest in.
- If you are a citizen of Singapore or Australia, you will be treated like a permanent resident or citizen of New Zealand when it comes to purchasing property, so you will not face the restrictions that other foreigners would face.
- If you are a buyer from abroad and you’re interested in making a limited investment in a hotel or apartment block, you will still be able to do so under the new law.
- As a non-resident of New Zealand, you might still be able to purchase a new apartment in a large development, even though you will not be able to purchase an existing home.
Basically, if you are an overseas resident, and you do not have intentions of actually living in New Zealand, you will likely find it challenging to invest in property there. And this new rule also applies to companies and trusts from abroad as well.
Potential exceptions to the rules
What if you got your New Zealand residency sorted, but you don’t yet meet the criteria and you absolutely can’t wait to buy real estate there? In this case, you might be able to apply for permission to make a purchase by contacting the Overseas Investment Office. You might need to prove that you are, indeed, committed to living in the country, and there might be some conditions that you’ll need to meet in order to be able to buy a property that you’re hoping to invest in.
As another option, if you can prove that your goal is to help boost the number of houses available in the real estate market in New Zealand, you might be able to avoid the restrictions discussed above. You might need to prove that you’re involved with a property development project first in order to get permission to purchase.
How to budget to buy property in New Zealand
Part of the reason why New Zealand has changed its laws regarding allowing foreigners to purchase property in the country is because of rising housing prices.
If you are able to make a purchase, consider the fact that you might need a large budget to do so. Of course, what you will end up paying depends on the type of property that you will be purchasing, as well as its location.
On the whole, the median home price in New Zealand is around $361,000 USD. If you want to invest in a property in a major city like Auckland, however, the median price is around $547,000 USD.
Use OFX to make payments on your property
After looking over the rules regarding investing in real estate abroad in New Zealand, you will be able to determine if you can buy immediately, or if you need to take some additional steps before becoming eligible to purchase. For example, if you’re a resident, but you haven’t been living in the country long enough, it might just be a matter of staying in the country for the necessary span of time before becoming eligible to purchase.
Once you have made your purchase and you need to make payments on your property, the next step is to figure out the smartest way to go about doing so. With the assistance of an online global money transfer service like OFX, you can rest assured that your money will move swiftly and securely from your bank account to its destination in New Zealand. Along the way, you’ll be able to save money, too, as you will be avoiding the high margins and fees that a bank would charge for the same transfer.
New Zealand home ownership is still possible!
Gorgeous natural landscapes, friendly locals, an amazing culture, and plenty of fun things to do are just a few reasons why so many people make their way to New Zealand. Investing in property there might be a challenge, but if you know the rules, you can take steps towards becoming a homeowner and diving into everything that this incredible country has to offer.
IMPORTANT: The contents of this blog do not constitute financial advice and are provided for general information purposes only without taking into account the investment objectives, financial situation and particular needs of any particular person. UKForex Limited (trading as “OFX”) and its affiliates make no recommendation as to the merits of any financial strategy or product referred to in the blog. OFX makes no warranty, express or implied, concerning the suitability, completeness, quality or exactness of the information and models provided in this blog.