Did you know that Singaporeans enjoy a unique advantage when it comes to purchasing residential property in New Zealand?
In this article, we explore the privileges granted to Singaporean citizens and how other nationalities can navigate the regulations for property acquisition in New Zealand.
Free Trade Agreement between Singapore and New Zealand
In 2017, then Labour Party government under then Prime Minister of New Zealand, Jacinda Ardern, announced a ban on foreigners buying residential property in New Zealand, in an effort to tame rising house prices, mistakenly believed to be caused by foreign buyers, particularly from Mainland China.
This ban, which took effect in 2018, does not apply to Australian and Singapore Citizens, due to established diplomatic ties, and a free trade agreement with the Republic of Singapore.
As a result of the Free Trade Agreement between Singapore and New Zealand, Singapore Citizens, along with Australians, are treated as local buyers under the Overseas Investment Act (OIA). This allows them to acquire residential properties, including land, except for sensitive or protected land for the indigenous Maori population.
Can Foreigners buy Property in New Zealand?
Fortunately, the ban on foreign buyers is not an all-encompassing ban, and some exceptions apply.
Non-Australian and non-Singaporean foreigners can purchase OIA-exempted units, typically multi-unit residential developments. These developments, usually apartments, require developers to seek permission from the Overseas Investment Office of New Zealand, for permission to sell up to 60% of the total units available to foreigners. The development must have a minimum of 20 units, and is not yet completed. Once the project is completed and the exemption certificate expires, then foreign purchasers are no longer allowed to buy these units. In line with the OIA-exemption, these properties are designated for investment purposes only and cannot be used for personal occupancy.
Additionally, a foreigner whose spouse is a New Zealand, Australian, or Singapore citizen can jointly purchase any residential property as a relationship property. This privilege however, does not extend to friends, siblings or parent-child joint purchases.
Commercial and industrial properties in New Zealand, on the other hand, can be acquired by foreigners without the consent of the Overseas Investment Office, provided the value is less than NZD$100 Million.
What about Permanent Residents?
Singapore Permanent Resident (SPR)
Singapore Permanent Residents (SPRs) are treated as foreigners in New Zealand. They can purchase property either with their eligible spouse as a relationship property or through an OIA-exempted project.
Australian or New Zealand Permanent Resident
Australian Permanent Residents are accorded almost the same privileges as a New Zealand Permanent Resident (PR), due to both countries’ shared cultures and strong bilateral ties.
In Australia, an Australian Permanent Resident is treated like a citizen and is eligible to buy either new or resale residential properties in Australia. However, in New Zealand, there is a residency requirement where an Australian and New Zealand PR has to live in New Zealand for a minimum of 183 days in the preceding 12 months, in order to be considered ordinarily resident before they can purchase a residential property in New Zealand.
This means that even as a New Zealand PR, if you are completely offshore (for example, living and working in Singapore), you will not be able to purchase a residential property until you have fulfilled a minimum stay in the country. Otherwise, you will be treated as an overseas person and only allowed to purchase an OIA-exempted unit.
Are there any Additional Stamp Duties for Foreigners?
Unlike many other countries, New Zealand does not impose any Stamp Duty for property transactions, making it an attractive market for overseas investors. This absence of stamp duty allows investors, including foreigners, to own multiple properties and build a substantial real estate portfolio in New Zealand. In comparison, this is quite challenging to do in Singapore due to the substantial Additional Buyer’s Stamp Duty (ABSD) imposed on every additional residential properties.
Other Privileges for Singaporeans
Many local banks in other countries (such as Australia), do not offer mortgages to foreign investors.
There are at least 3 different banks and one non-bank lender in New Zealand offering financing to Singaporean investors, with options available up to 70% of the purchase price. This flexibility allows investors with existing properties in Singapore to explore opportunities in New Zealand without being restricted by Total Debt Servicing Ratio (TDSR) limitations.
Does Owning a Property in New Zealand help with Obtaining Permanent Residency?
Unfortunately, buying any land or property in New Zealand does not contribute to obtaining a residential visa or permanent residency. Individuals interested in migrating to New Zealand need to apply for a visa based on eligibility criteria, often related to specific jobs in sought-after industries. For more information, please refer to the official New Zealand Migration website.
Conclusion
If you’re considering real estate investments beyond Singapore, New Zealand presents itself as an attractive destination for Singaporean investors. With laws favoring Singaporeans and the absence of hefty taxes for overseas investors, New Zealand offers unique opportunities to grow your property portfolio.
Connect with our team of marketing agents specialising in New Zealand properties to embark on your investment journey.
