Applying from overseas
Guide for Singaporeans buying NZ Investment PropertyNew Zealand is an attractive country for foreigners looking to invest in real estate. The country is known for its natural beauty, diverse landscape, and friendly people, making it a popular destination for those looking for a change of scenery. Additionally, the New Zealand government has made it easy for Singaporeans to invest in property, with few restrictions and a streamlined process.
Apartments and Condominiums
These are popular among investors looking for properties in cities like Auckland, Wellington and Christchurch. They are also a popular choice for people looking to invest in rental properties.
Townhouses
Similar to apartments, townhouses are popular in cities and are a good option for people looking for low maintenance properties.
Single-family homes
These are popular among families and are available in both urban and rural areas. They offer large floor areas and typically have a lot of green space for keen gardeners or those looking for the space they can’t get in Singapore.
Lifestyle Blocks
These are larger properties, typically with a house and land, and are popular among home buyers looking for a more rural lifestyle.
Farms and Agricultural Land
New Zealand is known for its agriculture industry, and farms and agricultural land are a popular investment option for those looking to invest in the industry.
Agent Fees
Real estate agents typically charge a commission fee of around 3-4% of the sale price of the property.
Tax
Foreign buyers are subject to a stamp duty of 5% of the purchase price of the property. Additionally, there is a Goods and Services Tax (GST) of 15% on new properties if buying as a business.
Council Rates
Council rates are a form of property tax and are based on the value of the property. They are paid annually and are used to fund local government services. As an example, a home in Auckland valued at NZ$2m may expect to pay around NZ$4,000 in rates per annum.
Land Taxes or Capital Gains Taxes
New Zealand does not have a land tax, but there is a capital gains tax on the sale of property. This tax is calculated based on the profit made from the sale of the property and is typically 15%. It’s measured based on usage (owner-occupied vs investment) and time between purchasing and selling. It’s not a straight capital gains tax as seen in other countries and looks to not penalise homeowners.
Traditional Bank Mortgage
A traditional mortgage is a loan from a bank or financial institution that is secured by the property. The loan is typically repaid over a period of 20-30 years.
Non-Bank Lenders
Non-bank lenders are private companies that offer financing options outside of traditional banks. These lenders typically have more flexible lending criteria but may charge higher interest rates.
Vendor Financing
Vendor financing is when the seller of the property provides financing to the buyer. This option can be beneficial for buyers who are unable to secure financing through traditional means. Not common but is sometimes an option for higher end luxury properties where buyers are limited.
Apartment size
Banks have limited appetite for apartments under 40m2 so avoid these if you are looking for a supporting loan.
Luxury property
Banks will lend less of property in the luxury space so if you are looking at a coastal property or a small island where there are limited buyers in the market, banks will tend to extend less lending against them.
Offshore income
Banks will want to see evidence of offshore income in English and from reputable sources. They will ask for bank statements and financial accounts. They may discount this income by up to 30% depending on circumstances.
Opening accounts
You will need to come to New Zealand to establish a relationship with a bank before settling a loan. The key piece of the puzzle to unlocking a banking relationship in New Zealand is the account opening and Anti Money Laundering clearance process and the only way to complete this is by visiting a New Zealand bank branch in person.
Property types
The types of properties available in each market are also different. In Singapore, most properties are high-rise apartments or condominiums due to limited land availability, while in New Zealand, there is a greater variety of property types available, including detached houses, apartments, and townhouses. Something else that’s important to note is that in Singapore most apartments are on 99-year leases where as in New Zealand most ownership is on a freehold basis.
Price
Property prices in Singapore tend to be higher than those in New Zealand, due in part to the limited land availability and high demand for property in the city-state. In recent years, however, the New Zealand property market has seen significant price increases, particularly in the larger cities such as Auckland and Wellington.
Foreign ownership
Singapore has tighter restrictions on foreign ownership of property than New Zealand. Foreigners can only purchase certain types of property in Singapore, such as apartments in high-rise buildings, and must pay additional stamp duty fees. In New Zealand, foreign ownership of property is generally allowed, although there are some restrictions on purchasing certain types of property, such as farmland.
Rental market
The rental market in Singapore is highly regulated, with landlords required to follow strict guidelines and rent control measures. In New Zealand, the rental market is less regulated, with landlords and tenants negotiating rents and lease terms independently.
Mortgage rates
Mortgage rates in Singapore are generally lower than those in New Zealand, due in part to the lower interest rates set by the central bank. However, there are stricter lending criteria and down payment requirements for obtaining a mortgage in Singapore.
Overall, while there may be some similarities between the New Zealand and Singaporean property markets, there are also significant differences in terms of size, property types, pricing, foreign ownership restrictions, rental market regulations, and mortgage rates. It is important for buyers to understand these differences when considering purchasing property in either country.
Foreign ownership of property in New Zealand is governed by the Overseas Investment Act 2005. The act regulates foreign investment in sensitive New Zealand assets, including land, businesses, and significant infrastructure. Under the act, foreign investors must obtain approval from the New Zealand government before purchasing sensitive assets.
Singapore citizens are considered foreign buyers under the Overseas Investment Act, and as such, must obtain approval from the New Zealand government before purchasing property in the country. However, Singapore citizens have an exemption for buying urban residential land and are eligible for streamlined approval processes avoiding screening under New Zealand's free trade agreement with Singapore, something only Singapore and Australia have and something that puts them in a unique position as foreign buyers.
The New Zealand government has historically been supportive of foreign investment in the country, including foreign investment in property. The government views foreign investment as a way to boost economic growth and increase job opportunities. As a result, the approval process for foreign buyers is generally straightforward, provided the buyer meets certain criteria.
There are some restrictions around sensitive land, land that has conservation land or rivers and lakes next door are examples of sensitive land, where city homes are generally not considered sensitive land. Despite these restrictions, Singapore citizens are still able to purchase property in New Zealand, provided they meet the necessary criteria and obtain approval from the New Zealand government. The process for obtaining approval typically involves submitting an application to the Overseas Investment Office, providing details about the proposed purchase and the buyer's financial status. If approved, the buyer will be required to pay the necessary fees and taxes associated with the purchase.
Overall, while there are some restrictions on foreign ownership of property in New Zealand, Singapore citizens are still able to invest in the country's property market. The government's policies are aimed at striking a balance between encouraging foreign investment and protecting the interests of local residents. As such, Singapore citizens looking to invest in New Zealand property should consult with a reputable real estate agent or legal professional to ensure they understand the process and requirements for foreign ownership.
Auckland
Auckland is New Zealand's largest city and the economic powerhouse of the country. It is a vibrant, multicultural city that offers a diverse range of cultural activities, dining options, and nightlife. It is also home to some of New Zealand's best beaches and outdoor activities. Auckland's property market is diverse and offers a range of options for homebuyers, from modern apartments to sprawling suburban homes. The city's job market is strong, with opportunities in industries such as finance, technology, and healthcare. Auckland also boasts excellent schools and universities (Auckland University and Auckland University of Technology), making it an attractive option for families.
Tauranga
Tauranga is a coastal city located in the Bay of Plenty region of the North Island. It is known for its stunning beaches, beautiful harbour, and relaxed lifestyle. Tauranga has a strong economy, driven by industries such as horticulture, tourism, and manufacturing. It also has a growing technology sector, which is attracting young professionals to the area. The city has a range of housing options, from affordable apartments to high-end waterfront homes. Tauranga is also home to some excellent schools, making it a popular choice for families.
Hamilton
Hamilton is a vibrant city located in the heart of the Waikato region of the North Island. It is known for its friendly, community-focused atmosphere and affordable cost of living. Hamilton is a great place for families, with a range of excellent schools and one university (Waikato University) and plenty of outdoor activities on offer. It’s known as a gardener’s city as it has great growing conditions and is home to the internationally renowned Hamilton Gardens. The city has a strong economy, with opportunities in industries such as agriculture, manufacturing, and healthcare. The property market in Hamilton is affordable compared to some of New Zealand's larger cities, with a range of options for homebuyers.
Wellington
Wellington is the capital city of New Zealand and is located at the southern tip of the North Island. It is a bustling, creative city with a thriving arts scene, excellent dining options, and a vibrant nightlife. Wellington is also home to some of New Zealand's best schools and universities (Victoria University), making it an attractive option for families. The city has a strong economy, with opportunities in industries such as technology, government, and tourism. Wellington's property market is diverse, with a range of housing options available, from character homes to modern apartments.
Christchurch
Christchurch is the largest city in the South Island and is known for its stunning natural scenery, friendly locals, and relaxed lifestyle. Christchurch has a strong economy, with opportunities in industries such as agriculture, manufacturing, and technology. The city's property market is affordable compared to some of New Zealand's larger cities, with a range of options for homebuyers. Christchurch is also home to some excellent schools, making it an attractive option for families. Again, it has great schools and universities (University of Christchurch and Lincoln University).
Dunedin
Dunedin is a coastal city located in the south of the South Island. It is known for its stunning natural scenery, rich history, and vibrant student population. Dunedin has a strong economy, with opportunities in industries such as healthcare, education, and tourism. The city's property market is affordable compared to some of New Zealand's larger cities, with a range of options for homebuyers. Dunedin is also home to some excellent schools and universities (Otago university), making it a great choice for families and students alike. Overall, each of these cities offers unique benefits for someone considering living in New Zealand. It is important to consider factors such as job opportunities, cost of living, and housing options when deciding which city is the best fit. Many families choose New Zealand for a range of reasons with quality of lifestyle and education being two of the bigger reasons. Ultimately, the choice will depend on individual preferences and priorities.
Queenstown and Wanaka
Located in Central Otago with the nearest city being Dunedin, Queenstown and Wanaka are the alpine playground of New Zealand. Nestled amongst the mountains of the Southern Alps and with lake views, these two towns are a growth region of New Zealand, are popular with overseas buyers and are a growing region of New Zealand.
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