Buying a House in New Zealand



An older style home is removed from a section. It will be sold and a new house built on the vacant land.

First things first
Do nothing. Don’t rush into buying a house here. Give yourself time to learn something about the local market.

Money
If you need a mortgage, arrange it with a bank. New Zealand banks approve mortgage applications quickly.

Do your groundwork – learn about the local property market
“Open homes” are popular with both sellers and buyers in New Zealand. Anyone is welcome to look around an “open house” without making an appointment first. Visiting open homes is a great way to learn about the property market in your area.

Another way to see lots of houses quickly is to go on a tour with a real estate agent. Agents are usually happy to spend an hour or two driving migrants around, hoping for a sale. Agents earn significant commissions on house sales so most are willing to show you plenty of houses.

Buy the house of your dreams
If you eventually find the house of your dreams – and it’s one you can afford – you should make an offer for it. Most New Zealand property is offered at a fixed asking price. Unless the market is red-hot, it’s normal to offer less than the asking price. Your local research will enable you to make an appropriate offer.

Another popular way of selling houses is by auction. Occasionally a bank forces an auction when borrowers cannot keep up with their mortgage payments. More often, auctions are used when sellers think buyers will bid the price up.

Sellers pay extra fees for auctions – so agents earn more money from auctions than fixed price sales. Even if a house doesn’t sell, the seller still has to pay auction fees. For this reason, agents are often keen to persuade homeowners to sell by auction.

Suburban Home

A good quality suburban bungalow.


Make sure you buy a house, not a lemon
If you like a house and you intend to make an auction bid for it, you’ll need to arrange all the other parts of the buying process before the day of the auction. You’ll definitely need a solicitor to check the property title. We’d also strongly advise you to get an independent valuation of the house and have a building inspection carried out. You may learn enough from these to deter you from bidding or to alter the amount you’d be willing to bid.

You would be well advised to find solicitors and inspection agents by recommendation – and I don’t mean a real-estate agent’s recommendation. Agents may act like your friends but they aren’t. They are acting for the seller and for themselves. This is another reason not to buy too soon after you arrive. By waiting you give yourself time to meet people whose judgement you trust and whose recommendations you can rely on.

A document you definitely need to see before you complete your purchase is a Land Information Memorandum (LIM). The LIM contains information from the local council about a property’s zoning, boundaries, building consents, etc. For a copy of a LIM, local councils charge anywhere between $100 to $400. This is expensive, particularly if you do not buy the property.

LIMs also have a slight reputation for containing unreliable information. Once you’ve got the LIM, it’s a good idea to visit the local council’s building department to discuss it. You can ask for any additional information they have on the property – often they have more than they’ve included in the LIM.

To learn even more about any house that interests you, you can pay a fee to the government’s Quotable Value. For around $5, QV will tell you the prices other properties in the neighbourhood are selling for, For $4 they will report on how much a house sold for previously. $50 buys a hazard report, etc, etc.

House 2

Make an offer for a house selling at a fixed price
If the house is selling at a fixed price, you will normally make an offer through the real-estate agent. The process usually involves offer and counter offer until you reach an agreement with the seller. During this negotiation the seller may agree to remedy any faults your building inspection has uncovered.

You are entitled to attach conditions to your offer. You may make the offer conditional on obtaining a satisfactory inspection report or a satisfactory LIM report. Or your offer may be conditional on your own house selling. Even if the seller accepts your conditional offer, you need to be careful. If someone comes along with an unconditional offer, the seller can accept this offer – leaving you to start house hunting all over again.

When your offer goes unconditional you will be expected to pay a ten percent deposit on the purchase price.

Make an offer for a house selling by auction
If the house is being auctioned, it’s okay to make an offer before auction day. Just be aware that your offer is legally binding. It actually has legal status as an auction bid, albeit an early one. You therefore cannot attach any conditions to it. The seller is at liberty to accept or reject your bid, or continue with the auction on the planned day. The seller could then hold your early bid in reserve, hoping for higher bids on auction-day.

If a house does go to auction, don’t be surprised if you find yourself bidding against the sellers – an agent is allowed to make bids on the seller’s behalf. If you suspect you’re in a bidding war against the sellers themselves, you should probably stop bidding. If you buy a house at auction, you need to have funds available immediately for settlement.

It’s over
A few days or weeks after your offer is accepted, you should at last be able to move into your dream house in New Zealand. Whether you bid in an auction or buy a house more conventionally, I hope it goes well for you.


Comments

  1. Mariia Sergeieva says:

    Dear ENZ Team,

    we would like to move to NZ on a permanent basis and buy a house there. Does buying a house gives us the residence of NZ?

  2. steven Nadollek says:

    Can I get a mortgage on a work to residence visa.

    Regards

    Steven Nadollek

    • You could check the criteria for each bank.

      For example, the Kiwibank requires that mortgage applicants are permanent New Zealand residents or a New Zealand citizens.

      People in a similar position may be members of our forum, a good option you could pursue is to talk about mortgage options there.

      http://www.enz.org/forum/

  3. We are thinking of buying a house to retire to in NZ. Do you pay stamp duty on the purchase of a home in NZ. What other cost are there when buying a house?

    • Hi Ric,

      There is no stamp duty, land tax or mortgage stamp duty on a house purchase in New Zealand.
      The typical costs involved in a house purchase may be solicitor’s fees ($1,000+), builder’s survey costs ($300+), valuation report ($500+) and Land Information Memorandum (LIM) costs ($100+).

  4. Pauline says:

    I am an Australian citizen considering buying a house in NZ for holidays only.
    Can you tell me what the rules are or if there are costs that I need to consider.
    Regards,
    Pauline

  5. Hi We have recently migrated to NZ. We still have property income generated in UK. will any mortgage lender take this into consideration when we apply for a mortgage? Only one of us is working at present due to settling the children in before we both go to work

    • Julia Carlsen says:

      Hi Anne
      We just went through the same motion with a property in the UK.
      They will take it into consideration when applying for a loan, as long as you can give them the rental agreement and bank statements with the rental income.
      Keep in mind that income worldwide needs to be declared in New Zealand.
      Regards,
      Julia

  6. Christina says:

    Hi, when buying property in nz does that mean I have to pay nz tax on my Australian income?

    • Hi Christina,

      Generally no, you will not have to pay NZ tax on your Australian income if you are an Australian with a rental property in NZ.

      As long as you qualify for non-resident status, then you will only pay income tax in New Zealand on any NZ income source such as rental income on a NZ property.

  7. I’m looking to move to NZ, North Shore area next year and I was trying to find out what costs are associated to buying a house. Apart from the deposit, I understand there are likely to be Solicitor fees, Surveyor fees etc, does anyone have this detail?

    Thanks!

  8. rosemary wigmore says:

    We have family in New Zealnd in Howick, North Island, and re looking to buy a property we can stay in on our extended visits,
    What are the legal implications, we would be a cash buyer.
    is there someone we could ask advice from re the legal minefields of buying abroad that can talk you though it all
    Thank you
    Rosemary

    • Hi Rosemary,

      Sorry but I do not have any experience of buying a NZ property from overseas.

      There may be people in your situation on the ENZ forum who would be able to give you an answer.

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