Investing in New Zealand
Investing in New Zealand property is a relatively straightforward process.
New Zealand has an easily understood land title system based on the Torrens system of land registration. The Land Transfer Act 1952 provides for a public register of land titles which can be easily obtained and interpreted. Transactions can be conducted in reliance on the accuracy of this register.
You can generally buy commercial property up to NZ$100 million in value without the need for Government (Overseas Investment Office) approval. The exceptions to this are where the property encompasses more than five hectares of land or is located on “sensitive” land e.g. property adjoining the waterfront or an esplanade reserve. If you do require Overseas Investment Office approval, Bayleys can put you in touch with lawyers who are experienced in making these applications and have a good success rate.
There are no exchange controls affecting remittances to and from New Zealand. A free flow of capital in and out of the country is permitted.
You can purchase and sell property in New Zealand as an individual or through a company or trust. If you purchase through a real estate agency their fee will be paid by the vendor unless you have contracted an agent to act on your behalf for an agreed commission or fee.
If you are foreign based investor buying a property you are generally required to have a fully functioning bank account and an Inland Revenue Department (IRD) New Zealand tax number. Information on how to do this can be found here.
All property purchasers and sellers must fill in and sign a one-page Land Transfer Tax Statement. This will require you to provide an IRD number unless you have been granted an exemption. You will also be required to disclose whether you are a taxpayer in another country and provide any taxpayer identification numbers you have in other countries.
These requirements were introduced late last year to enable the New Zealand Government to monitor the amount of foreign investment in New Zealand and strengthen anti-money laundering initiatives. New Zealand is one of the most corruption-free countries in the world and welcomes and facilitates foreign investment. If you are a reputable offshore purchaser you should have no problems complying with these requirements and acquiring a property here.
All investors should, however, seek independent professional advice and assistance before purchasing. If required, Bayleys can provide the names of well-regarded advisers, such as lawyers and accountants who can also assist you in this regard and in obtaining a bank account and tax number. Under their code of ethics, these advisers are required to act in your best interests.
Bayleys also has one of New Zealand’s largest commercial property and facilities management companies, Bayleys Property Services. It manages a large number of properties on behalf of offshore owners and can act on your behalf in dealings with tenants and other property matters.