Can I buy an investment property in New Zealand if I live overseas?

In 2018, the newly-elected Labour government introduced a foreign buyer ban. While that sounds tough and makes for good headlines, the legislation does not have as much teeth as it may seem.

Non-New Zealanders can still buy property in Aotearoa, but there are restrictions on what you can buy depending on the country in which you hold citizenship and residency.

This article breaks down who can buy an investment property in New Zealand, and what you can buy.

Do you have a question or comment about overseas investments? Feel free to leave your thoughts in the comment section at the end of the page.

The three categories of property buyers

If you want to buy property in New Zealand, you’ll fall into one of three categories, which determine what you can buy.

Some people don’t need consent and can freely buy any residential property; others need to apply for approval from the Overseas Investment Office; some can only buy specific properties exempt from restrictions.

Let’s go through each of these categories.

People who can freely buy property in New Zealand

There are four groups of people who can freely purchase residential investment properties in New Zealand.

If you are a New Zealand citizen – whether you currently live in New Zealand or not – you can purchase any sort of residential or commercial property. You’ll face no restrictions through the Overseas Investment Act.

This also applies to Australian and Singaporean citizens, as long as you are not purchasing ‘sensitive’ land (more on this below). That means you can buy any sort of investment property in Aotearoa.

Next are permanent residents of New Zealand, Australia and Singapore, or people who hold any other New Zealand resident visa.

These prospective investors can buy residential property – as long as they are considered ‘ordinarily resident’ within NZ.

To be considered ordinarily resident, you must:

• Hold a New Zealand resident or permanent resident visa
• Have lived in NZ for at least 12 months
• Have been physically present in NZ for at least 183 days (half a year) of the last 12 months.

Some resident visa holders may find this tough to meet right now, due to Covid-19.

For instance, although you’re a permanent resident in NZ, you may have spent the last 6+ months overseas, unable to get into the country.

So, because you’ve spent more than half of the last 12 months offshore, you’re no longer considered ‘ordinarily resident’.

That means you can’t freely purchase residential property and will fall into the second and third categories.

Finally, if your partner doesn’t need consent to purchase, you don’t need to seek permission either. You are free to buy with them, as long as the property is considered relationship property.

If you don’t meet any of the above criteria, you can still buy investment properties within New Zealand; there are just more restrictions on what you can buy.

People who need consent to purchase property within NZ

The next group of people who can purchase property need consent from the Overseas Investment Office.

This applies to anyone who:

• Is a permanent resident of New Zealand, Australia or Singapore and is not ordinarily resident in New Zealand, and
• holds an NZ resident-class visa, but is not ordinarily resident.

If you fall into this category, your application will be approved under the One Home For All policy.

That means the property you buy will need to be an owner-occupier, and you need to live in it for at least 6 of the next 12 months.

That means you can only buy one property, and it can’t be used as an investment until:

• You’ve lived in New Zealand for 12 months, and
• you’ve spent at least 6 of those 12 months physically present in the country.

At that point, you will be classed as an ordinarily resident and can convert it into an investment property.

This will not be a good way to purchase your first investment property in NZ if you fall into this category and have no intention of moving here.

That’s because you won’t meet the conditions of approval.

If you’re caught buying a property and not meeting your consent conditions, it is likely you will be forced to sell it.

However, if you want to move to NZ and purchase an owner-occupied home, you can apply to the Overseas Investment Office for permission.

This costs $2,040 per application and is usually processed within 10 working days.

People who are restricted to purchasing specific properties within NZ

If you don’t meet any of the above criteria, you can still purchase NZ investment properties. But you can only buy properties that aren’t restricted under the act.

You’ll fall into this category if:

• You are a citizen of any country, other than New Zealand, Australia and Singapore
• You are a permanent resident of NZ, Australia or Singapore but aren’t considered ‘ordinarily resident’ and want to purchase an investment property
• You hold an NZ work visa, student visa, work-to-residence visa, working holiday visa or visitor visa, and you aren’t able to meet the criteria for the other categories.

That raises the question – “what sort of properties can I still buy?”

There are two types of residential properties you can still purchase.

The first is large multi-storey apartment developments.

A developer building a large apartment block can apply for an exemption certificate, which allows them to sell up to 60% of their units to overseas buyers.

To qualify the apartment building must have multiple storeys and at least 20 units.

The second type of residential investment property you can buy is hotel units. Again, these also need to be multi-storey, built on residential land, and have at least 20 units.

The only difference here is that a hotel developer does not need an exemption certificate to sell to overseas buyers.

But, if buying a hotel unit, the foreign buyer does need:

• To enter into a leaseback arrangement with a hotel operator, and
• cannot use their hotel unit for more than 30 days a year.

That stops overseas buyers purchasing a hotel unit and then choosing to live in it for a large part of the year.

What sort of land tends to be classed as sensitive?

If you’re not:

• An NZ citizen, or
• an NZ residence-class visa holder who is ordinarily resident in NZ.

Then you will never be able to purchase land that is considered sensitive by the Overseas Investment Office.

Usually, a property lawyer will pick up whether the land you’re attempting to buy is considered sensitive. That’s because this is complex and case-by-case.

If you’re an Australian or Singaporean citizen attempting to buy a regular residential investment property, you’re unlikely to be looking at properties that would fall in this category.

That’s because the land that tends to be considered sensitive is farmland, rural, or land by a river, sea, reserve or lake.

Flow chart of who needs consent

Because these rules tend to be complex, here is a simple flow chart that can help you understand what property types you can buy within New Zealand.

So, ‘can I buy an NZ investment property if I Live overseas?’

Yes, any foreign buyer can purchase an investment property within New Zealand. But, some foreign buyers will face more restrictions than others.

If you’re living overseas and are an NZ, Australian or Singaporean citizen, you have more options than someone who is Estonian, for example.

But, no matter your visa situation, you can still buy an investment property in this country. The property you invest in just can’t be covered by the Overseas Investment Act restrictions.