Foreign acquisition of NZ property – Exceptions & Prohibitions

11 Nov 2025

The recently announced right for Active Investor Plus visa holders to acquire a $5 million plus value property has gained attention, but given such property is likely to exclude "otherwise sensitive" land, many properties in this price band are ruled out.

By way of example, otherwise sensitive land includes land on islands such as Waiheke, water & reserve fronting land, heritage protected property and land over 5 ha. Foreigners have been prohibited from purchasing otherwise sensitive land for decades. Politically, it was difficult enough for the coalition government to obtain agreement – our understanding is that the purchase of otherwise sensitive land remains firmly off the table.

There are however a few exceptions available to foreigners that are worth exploring. We consider two exceptions enabling the purchase of property under the $5 million threshold:

• Although foreign ownership of residential property is generally prohibited, if one partner in the relationship holds either New Zealand, Australian or Singaporean nationality, a unique exemption is available. An agreement entered into pursuant to the Property (Relationships) Act 1976 can agree that the property will be treated as relationship property, with the result being that it then becomes possible for the couple to acquire the property. We have assisted various foreign clients to legitimately purchase NZ residential property via this exception, including when neither partner was living in New Zealand.

• When a property has a dual usage and meets specific Valuation Category Code requirements, there are situations where the prohibition in respect of residential property acquisition by foreigners will not apply. There are, for example, some commercially-used properties, such as medical practitioner premises in the middle of a suburban area, that don’t have a Residential Valuation Category Code, but which can still be used for residential purposes. Such properties are often located in excellent neighbourhoods. As you would expect, this exemption requires specialist advice to ensure compliance with both the Overseas Investment Act and Council town planning requirements.

It is worth mentioning that trying to conceal ultimate foreign acquisition via third parties does not get around the prohibitions and if property has been purchased in breach of the foreign buyer ban, the implications are harrowing. Unauthorised purchase of NZ property has become the subject of increased focus lately by both Land Information New Zealand (LINZ) and Inland Revenue; we understand both teams have quadrupled their staff looking into property transactions. The LINZ enforcement action taken page makes for sobering reading.

Whether you would like assistance on your journey for purchase of your NZ home or whether you would like to understand your situation in respect of existing property, we have the experience to assist you.