New Zealand

Why New Zealand?

Despite being as far away from the UK as you can get, New Zealand does tend to remind many people of home. The sandy beaches of the North Island have been likened to Cornwall, while the rugged hills of the South Island are reminiscent of Scotland. The weather is also better, with the North Island boasting hotter summers and milder winters, while the South has fresh summer days and plenty of snow during the winter.

Popular buying locations

Auckland, the country’s biggest city, has seen a lot of investment over recent years. Bars, cafés and restaurants now line this thriving viaduct, while luxury apartments offer views to die for.

The capital city of Wellington maybe somewhat windy, but it does boast the impressive Beehive – the unusually shaped parliamentary complex that’s home to the offices of the Prime Minister. House prices in the world’s most southern capital have grown by 9.5 per cent during the past year, resulting in an average house price of $440,455 (£155,500).

The buying process

The process of purchasing a home in New Zealand is rather straightforward. When you have found a property you like you then put in an offer.

Legal issues

If you have been granted permanent residency there are very few restrictions on the type, or the amount, of property that you are allowed to buy.

Whatever type of property you decide to buy, you can rest assured that you won’t be gazumped, as accepting a written offer is legally binding.

Finance

It is relatively easy to get a mortgage in New Zealand, providing that you meet the usual criteria. Generally banks lend 90 per cent of the purchase price for up to 25 years. Interest rates fluctuate from bank to bank, but tend to vary between six and eight per cent depending on whether you opt for a fixed or variable rate. Banks do tend to be slightly more flexible in New Zealand, and are occasionally open to negotiations regarding rates.

Repayment mortgages are known as Table mortgages. Interest Only loans are also available, but so are Reducing mortgages. So your payments start relatively high and reduce over time – hence the name.

Fees and taxes

The good news for potential property buyers is that there isn’t any stamp duty in New Zealand, or indeed any inheritance tax. Capital Gains tax is also non-existent – unless property trading is your profession.

Therefore, when buying a Kiwi home, you will need to budget for solicitor’s fees at around $1,000 (£352), a valuation fee of about $400 (£140), a building inspection report at $400, the Land Information Memorandum at $150 (£53) and a transfer fee of around $50 (£18). If you are buying with a mortgage, you will also be required to pay a registration fee which will cost about $50. All of the above figures include GST (goods and services tax) at 12.5 per cent.

When selling a property in New Zealand you will be liable for solicitor’s fees and estate agency charges – budget around three to four per cent of your asking price for the latter.

Visas, residency and work permits

If you are planning to buy a property in New Zealand solely as an investment then there are very few restrictions. However, if you are planning to emigrate then you will need to apply for permanent residence. A Family Visa can be gained if you are sponsored by a member of your family who is already a New Zealand citizen or resident, while a Business Visa encourages investment into the country by allowing you to set up a new venture.

Finally, you can gain permanent residence by investing with the New Zealand government.

New-build versus resale

If you are after a new-build home you will find a good selection in the city centres, although the choice does tend to be solely between apartments and townhouses. If, however, you want to live in a more rural area then buying a new-build property is a more unusual process than in many other countries.

Outside of New Zealand’s urban areas there is no such thing as a purpose-built development. There are plenty of developers, but they only take responsibility for the actual building process.

Most developers have a huge range of property designs that you can choose from, but will also work with you to design your own home if you prefer.

Investment potential

There are plenty of property management firms available in the country – a necessity if you are planning on renting your property out from the UK. Landlords tend to offer unfurnished properties, and the occupancy rates are higher in the cities thanks to the high rates of migrants moving there.

However, due to the exchange rate, you may want to think twice before investing in New Zealand if you are planning on bringing your profit back to the UK. Financially, buying a kiwi home is far more lucrative if you are planning on staying in the country for the long term.

Health and education

Healthcare is of a good standard in New Zealand, and is generally funded through a public taxation system. Private healthcare is available, and if you are not a permanent resident it is essential that you have health insurance.

If you are planning on taking your children to New Zealand, there is the usual choice of state-run and private schools. International students must have a student permit to study in a Kiwi school for any period longer than three months.

Transport

If you are crossing from the North to the South Island, or visa versa, a frequent ferry service is in operation – likewise if you are planning to visit Stewart Island. The smaller islands that surround New Zealand, such as in the Hauraki Gulf, are easily accessible via passenger ferry. Internal flights from Auckland are available to Wellington, Christchurch and Queenstown, but this can be an expensive option.

And finally…

While New Zealand offers fabulous scenery and a relaxed pace of life, it is a long way from home.

As with any overseas purchase, it is advisable to rent a property before you commit to buying your own. Never has this statement been truer than when considering a home in the New Zealand countryside. Finally, think carefully about the location of New Zealand.