Property

In New Zealand, all land titles are maintained in a comprehensive, searchable online registry, with the Government guaranteeing the completeness of these records.

This ensures a high level of certainty and security when purchasing and holding title to land. The process of acquiring and transferring land can be made reasonably straightforward when guided by experienced property law practitioners.

New Zealand law recognises various types of property interests, including freehold, leasehold (both residential and commercial properties), cross-lease, and unit titles. Additionally, there are personal rights to use land granted by licences.

Unique land rights are also recognised, such as the rights to extract resources from land and certain rights associated with Māori land.

With the exception of the Overseas Investment regime (see Overseas investment regulations), there are no other distinctions between domestic and overseas purchasers of land.

In New Zealand, the usual process for acquiring residential or commercial property begins with signing an agreement for sale and purchase of real estate. These agreements often include conditions that, for example, provide a purchaser with an opportunity to conduct due diligence on the property after signing an agreement for sale and purchase.

Common conditions of sale may include:

• reviewing records of title;

• completing a satisfactory building inspection;

• resolving any resource management issues;

• arranging finance; and

• in respect of leased commercial or industrial buildings, reviewing those leases.

New Zealand taxes net rental income derived from real property. The applicable income tax rate depends on the profile of the investor(s).

From April 2024, the ability to claim tax depreciation on commercial and industrial buildings ceased to be available, although depreciation can still be claimed on commercial fit-outs. Similarly, tax depreciation is not available for residential properties, including most build-to-rent developments. Inland Revenue prescribed depreciation rates must be used for tax purposes irrespective of what rates are used for accounting.

Deductions for interest are generally available in relation to borrowing used to acquire commercial property, subject to several restrictions including the general anti-avoidance provisions, thin capitalisation, transfer pricing and anti-hybrid rules. As of 1 April 2025 there is an ability to claim 100% of interest deductions on residential rental property borrowing.

While New Zealand does not have a comprehensive capital gains tax, there are a number of land taxing provisions that may apply to tax gains on the sale of land that would otherwise be considered a capital investment.

These include, for example:

• Bright-Line Test: A bright-line test applies to residential land sold with two years from acquisition. The current rules provide that on such sale, any gain on the sale price may be taxable, except in certain circumstances such as when the property is used as the seller's main home.
• Dealer, Developer, or Builder Rules: Gains from land sales may be taxed if the land was acquired by individuals or entities engaged in land dealing, development, or building activities, or by those associated with such persons.
• Land Development for Sale: If land is developed with the purpose of sale, any gains from the sale may be subject to taxation.
• Purpose or Intention of Disposal: Gains may be taxed if the land was acquired with the intention or purpose of resale at a profit.

In New Zealand, commercial leases are typically governed by a combination of statutory law, such as the Property Law Act 2007, and the specific terms and conditions outlined in individual lease agreements. 

Many commercial leases in New Zealand use standard form agreements, such as those provided by The Law Association (TLA). These forms are widely recognised in New Zealand and provide a comprehensive framework for both landlords and tenants, although they may be modified to suit specific needs.

The common terms that are  typically negotiated between the landlord and tenant are:

• Length of the lease term. 
• Rent and rent reviews (both frequency and type, with market, CPI-based and fixed increases, all as common methods of reviewing rent).
• Outgoings - Tenants are usually responsible for paying outgoings in addition to rent, which can include insurance, utilities, and maintenance costs. 
• Repair and maintenance obligations. 
• Assignment and subletting -  Leases usually contain clauses setting out the process and need for landlord consent to an assignment or subletting of the lease.
• Reinstatement - Reinstatement refers to the tenant's obligation to return the leased premises to its original condition at the end of the lease term, excluding any liability for reasonable wear and tear. 
• Default and termination - The lease will outline the default provisions and process for termination of the lease if any default is not remedied.

There are also terms implied in leases under the Property Law Act 2007 unless they are expressly negated or varied by the terms of the lease. Additionally both landlords and tenants must comply with other relevant legal requirements, including health and safety regulations, building codes, and any applicable zoning laws.

New Zealand has strong cultural respect for the natural environment which is reflected in our legislation. New Zealand’s resource consent framework is a primary consenting process for activities which affect the environment, and deals with the management of natural and physical resources such as air, soil, freshwater and coastal marine areas. 

The resource consenting regime, established under the Resource Management Act 1991 (RMA), has been subject to recent scrutiny, and is in the process of undergoing a major reform.

Many development and infrastructure projects are required to obtain various types of consents under the RMA prior to commencement. Consents include subdivision consent, land use consent, coastal permits, water permits and discharge permits.

Navigating these consent processes requires a thorough understanding of both the legislative requirements and the ecological significance of the activities involved. Engaging with environmental and legal experts is advisable to ensure compliance and to promote sustainable development practices.

In addition to the resource consent regime, the Building Act 2004 and the New Zealand Building Code provide performance standards for all building work in New Zealand, covering aspects such as structural stability, fire safety, access, moisture control, durability and energy efficiency.

Additionally, there is an increasing focus on sustainable building practices, with new measures being implemented to tackle the impacts of climate change. This involves updating building codes and standards to enhance energy efficiency and resilience. Similar to the resource consenting process, building consents can be obtained from local authorities. 

Seismic activity can be a particularly relevant consideration in New Zealand, and the Building Act 2004 and building consent regime includes minimum seismic performance requirements for existing and new buildings respectively.