Buying Property in New Zealand as a Foreign Buyer

New Zealand's stable economy, world-class lifestyle and internationally recognised property market continue to attract interest from overseas buyers. While the Overseas Investment Act places restrictions on foreign ownership of residential property, there are several legitimate pathways available depending on a buyer's residency status, visa type and the value of the property they intend to purchase.

There are different rules for Australian and Singaporean citizens and permanent residents, but for other foreigners relocating permanently, the process is often more straightforward than many realise. Meanwhile, recent changes have also opened a pathway for qualifying investor visa holders to purchase residential property valued at more than $5 million.

Here's what overseas buyers need to know.

BUYING A HOME UNDER $5 MILLION

The rules for purchasing residential property under $5 million largely depend on whether you are considered "ordinarily resident" in New Zealand.

Who can buy without Overseas Investment Office approval?

New Zealand citizens and people who hold a resident visa and are ordinarily resident in New Zealand can purchase residential property without needing consent from the Overseas Investment Office (OIO).

To be considered ordinarily resident, buyers must:

• Hold a New Zealand resident visa at the time of purchase
• Have lived in New Zealand for the previous 12 months
• Have been physically present in New Zealand for at least 183 days during those 12 months
• Be a New Zealand tax resident.

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How do you become a resident?

There are several pathways to New Zealand residency, including.

Skilled Migrant Category

Applicants qualify through a points-based system, requiring six points based on qualifications, income and skilled employment. Highly qualified applicants may qualify immediately, while others can earn additional points through time working in New Zealand.

Green List Pathway

Workers employed in occupations experiencing skill shortages may qualify through the Green List.

• Tier One occupations, including many doctors, nurses, teachers, engineers and IT professionals, can often apply directly for residence.
• Tier Two occupations generally provide a pathway to residence after working in New Zealand for 24 months within a 30-month period.

Sector Agreement Pathway

Certain occupations, including workers in parts of the care workforce and maritime sector, may also become eligible for residence after meeting specified employment requirements.

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What if you have residency but haven't lived here long enough?

Many migrants receive residency before they meet the 12-month ordinary residence requirement.

In these situations, it is still possible to purchase one home to live in by obtaining consent from the Overseas Investment Office before buying.

This pre-approval:

• Allows the purchase of one residential property to live in
• Lasts for up to 12 months
• Is not tied to a specific property
• Also allows buyers to purchase land and build a home, provided they meet the consent conditions.

Once the buyer becomes ordinarily resident, this consent is no longer required.

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The practical buying process

Once you're legally eligible to purchase, the buying journey is much the same as it is for New Zealand residents.

1. Decide where you want to live

Consider your lifestyle, family requirements, schooling, commuting and the type of property that best suits your needs.

2. Research the market

Work with an experienced Bayleys salesperson who can provide insight into local market conditions, neighbourhoods, pricing trends and available listings.

3. Arrange finance

Speak with your bank or mortgage adviser to understand your borrowing capacity and, where possible, obtain pre-approval before beginning your property search.

International buyers should also seek specialist tax advice, particularly if they hold investments or assets overseas, as becoming a New Zealand tax resident may have wider financial implications.

4. Engage a lawyer

A New Zealand property lawyer will confirm your eligibility to purchase, undertake the necessary due diligence and advise on matters such as title, zoning, settlement conditions and compliance requirements.

5. Begin your search

With finance arranged and legal advice in place, buyers can begin searching for suitable properties through Bayleys' national network of agents and property listings.

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BUYING RESIDENTIAL PROPERTY OVER $5 MILLION

A separate pathway now exists for high-net-worth migrants who hold qualifying investor visas.

Introduced under recent changes to the Overseas Investment Act, the $5 million-plus house pathway allows eligible investor visa holders to buy or build one residential property worth more than $5 million, subject to Overseas Investment Office consent.

Who qualifies?

This pathway is available only to holders of one of the following visas:

• Active Investor Plus Visa
• Investor 1 Visa
• Investor 2 Visa.

Other visa categories are not eligible under this pathway.

What properties are eligible?

Eligible buyers may:

• Purchase an existing residential property where the purchase price exceeds $5 million; or
• Purchase residential land costing less than $5 million and build a home, provided the combined land and construction cost exceeds $5 million.

The land must be classified as residential or lifestyle land and must not also be considered "otherwise sensitive" under the Overseas Investment Act, such as land adjoining beaches, rivers, lakes, reserves or conservation areas.

How does the approval process work?

Unlike the pathway for migrants purchasing a family home, investor visa holders apply for consent after identifying the property they wish to buy.

Buyers can sign a Sale and Purchase Agreement before approval is granted, but it must be conditional on receiving Overseas Investment Office consent. Failing to include this condition can result in significant penalties, including being required to sell the property.

Applications are assessed under New Zealand's national interest test. Residential purchases are generally regarded as low risk and will typically be considered under the first stage of assessment.

What are the application costs?

The application fee depends on the nature of the purchase:

• $2,040 for purchasing an existing dwelling worth more than $5 million.
• $3,500 where the application relates to purchasing land and constructing a new dwelling or other eligible scenarios.

What should buyers do first?

Because eligibility, property classification and consent requirements can differ depending on individual circumstances, overseas buyers should engage experienced legal advisers early in the process and work with property professionals who understand the Overseas Investment Act.

For qualifying migrants and investor visa holders alike, understanding the rules before beginning the property search can help ensure the purchase proceeds smoothly and without unnecessary delays.