New Zealand’s property market has long attracted international interest due to its stable economy, transparent legal system, and scenic appeal. However, purchasing property in New Zealand as a non-resident is subject to strict regulations, particularly under the Overseas Investment Act 2005 (OIA). This article explores the legal framework and acquisition process for residential, commercial, and industrial property, providing insights into due diligence, contracts, and recent legislative reforms.
1. Residential Property
Legal Restrictions and the OIA
Non-residents face limitations when purchasing residential property in New Zealand. The Overseas Investment Amendment Act 2018 largely prohibits foreign buyers from acquiring existing residential homes unless they:
- Hold a residence-class visa, and
- Are ordinarily resident in New Zealand.
Certain exemptions exist for citizens of Australia and Singapore, due to free trade agreements, and for high value properties – see below ‘Recent Changes’.
Consent Requirements
If a non-resident wishes to purchase residential land, they must apply for consent from the Overseas Investment Office (OIO). The OIO assesses whether the investment meets the “benefit to New Zealand”test, which includes factors such as:
- Economic development
- Environmental protection
- Public access
- Heritage preservation.
Acquisition Process
The residential property acquisition process typically involves:
- Finding a property via agents or online platforms.
- Making an offer through a Sale and Purchase Agreement (SPA).
- Conducting due diligence, including:
- Title search
- LIM report (Land Information Memorandum)
- Building inspections
- Zoning checks
- Applying for OIO consent, if required.
- Settlement, where ownership is transferred and payment is completed.
Legal Contracts and Due Diligence
The SPA is a legally binding contract. Buyers should include a due diligence clause, allowing them to withdraw if issues arise. Legal due diligence should cover:
- Title verification
- Zoning regulations
- Easements and encumbrances
- Unconsented building work
- Environmental concerns
Recent Changes: $5 Million Exemption for Investor Visa Holders
In September 2025, the New Zealand Government announced a targeted exemption to the foreign buyer ban. Under this change, holders of the Active Investor Plus (AIP) residency visa—and certain earlier investor visa categories—will be allowed to purchase or build one residential property, provided it is valued at NZ$5 million or more.
This exemption is designed to:
- Attract high-net-worth individuals and capital to New Zealand.
- Support economic growth through the Active Investor Plus programme, which requires:
- A minimum investment of NZ$5 million in higher-risk ventures over three years (Growth category), or
- NZ$10 million in lower-risk investments over five years (Balanced category)
Importantly, the exemption does not apply to sensitive land, such as rural, farm, or conservation areas.
Consent Requirements
Despite the exemption, buyers must still comply with the Overseas Investment Act (OIA). If the property involves sensitive land, OIO consent is required. The OIO will assess whether the investment meets the “benefit to New Zealand” test, which includes:
- Economic development
- Environmental protection
- Public access
- Heritage preservation.
Acquisition Process
The residential property acquisition process typically involves:
- Identifying a qualifying property (NZ$5 million+ and not sensitive land).
- Making an offer via a Sale and Purchase Agreement (SPA).
- Conducting due diligence, including:
- Title search
- LIM report (Land Information Memorandum)
- Building inspections
- Zoning checks
- Applying for OIO consent, if required.
- Settlement, where ownership is transferred and payment is completed.
Legal Contracts and Due Diligence
The SPA is a legally binding contract. Buyers should include a due diligence clause, allowing them to withdraw if issues arise. Legal due diligence should cover:
- Title verification
- Zoning regulations
- Easements and encumbrances
- Unconsented building work
- Environmental concerns
2. Commercial Property
Opportunities and Legal Framework
Unlike residential property, commercial property is generally open to foreign investment. This includes:
- Office buildings
- Retail spaces
- Hospitality venues
- Warehouses
However, in limited cases of the property involving sensitive land or significant business assets, OIO consent may still be required.
GST and Entity Structure
Foreign investors should consider Goods and Services Tax (GST) implications. Commercial property transactions are often zero-rated for GST, provided the buyer is registered.
Choosing the right investment entity is crucial. Common structures include:
- Limited Liability Companies (LLCs) – offer asset protection and simplicity.
- Trusts – useful for estate planning and family ownership.
- Limited Partnerships – ideal for joint ventures and shared investments
Acquisition Process
- Market research to identify suitable properties.
- Engaging professionals – lawyers, accountants and later – property managers.
- Due diligence, including:
- Lease agreements
- Tenant history
- Building compliance
- Zoning and licensing
- Negotiating the SPA with appropriate clauses.
- GST registration and financial structuring.
- Settlement and property management setup.
OIO Considerations
If the commercial property includes sensitive land (e.g., coastal or historic sites), or the investment exceeds NZ$100 million, OIO consent is required
3. Industrial Property
Industrial property is generally open to foreign investment.
Investment Scope
Industrial property includes:
- Manufacturing facilities
- Logistics hubs
- Warehouses
- Energy infrastructure (e.g., solar/wind farms)
These assets are attractive due to New Zealand’s growing logistics and renewable energy sectors.
GST and Entity Structure
Like commercial property, foreign investors should consider Goods and Services Tax (GST) implications. Industrial property transactions are often zero-rated for GST, provided the buyer is registered.
Choosing the right investment entity is crucial. Common structures include:
- Limited Liability Companies (LLCs) – offer asset protection and simplicity.
- Trusts – useful for estate planning and family ownership.
- Limited Partnerships – ideal for joint ventures and shared investments.
Legal and Regulatory Considerations
Industrial property may involve sensitive land, especially if located in rural areas or near protected zones. For example:
- Farm land over 5 hectares
- Land near marine/coastal areas
- Land with conservation or historical significance
Solar and wind farms often require OIO consent, particularly if the land use goes beyond typical easement rights
Acquisition Process
- Site selection based on infrastructure and zoning.
- Environmental assessments to check for contamination or protected areas.
- Legal due diligence, including:
- Title and zoning checks
- Resource consents
- Building Act compliance
- SPA negotiation with clauses for development timelines and regulatory approvals.
- OIO application, if applicable.
- GST registration and financial structuring.
- Development and operational setup.
4. The Overseas Investment Act (OIA): Key Insights
Sensitive Land and Significant Business Assets
The OIA defines sensitive land broadly, including:
- Residential and lifestyle land
- Non-urban land over 5 hectares
- Land near lakes, coasts, or reserves.
Significant business assets include investments over NZ$100 million, or lower thresholds for certain countries.
Investor Test
All applicants must pass the Investor Test, which assesses:
- Criminal convictions
- Tax compliance
- Immigration status
- Corporate governance.
Recent Reforms
The Overseas Investment (National Interest Test and Other Matters) Amendment Bill 2025 aims to:
- Streamline consent for low-risk investments
- Introduce a fast-track process
- Maintain screening for farmland, fishing quota, and residential land
These reforms are expected to be implemented by early 2026.
5. Legal Contracts and Due Diligence
Sale and Purchase Agreement (SPA)
The SPA outlines:
- Purchase price
- Deposit terms
- Settlement date
- Conditions (e.g., finance, LIM, building inspection)
Buyers should include a due diligence clause, allowing withdrawal if issues arise.
Due Diligence Checklist
- LIM report – zoning, hazards, consents
- Title search – ownership, easements, encumbrances
- Building inspection – structural integrity
- Environmental assessment – contamination risks
- Zoning and planning – permitted uses
- SPA review – legal terms and obligations
Professional Support
Engaging professionals is essential:
- Lawyers – for contracts and compliance
- Accountants – for tax and structuring
- Property managers – for ongoing operations
- Valuers and inspectors – for market and condition assessments
Conclusion
Purchasing property in New Zealand as a non-resident is possible, but requires careful navigation of legal frameworks, especially the Overseas Investment Act. While residential property is tightly regulated, commercial and industrial investments offer broader opportunities. Success depends on thorough due diligence, strategic entity structuring, and professional guidance. Contact info@iNZvest.co.nz for more information.