- Yes, you can get a home loan in NZ if you live in Australia. However, Australian banks cannot provide home loans for NZ properties, so you must secure financing through a New Zealand lender.
- Australians are exempt from NZ’s foreign buyer restrictions, meaning you can purchase property without Overseas Investment Office (OIO) approval.
- Financing options include applying with an NZ bank or using equity from an Australian property, though deposit and income verification requirements may differ.
- Buyers should consider NZ’s tax rules, including the Bright-Line Test for capital gains tax, and potential dual tax obligations in Australia and New Zealand.
New Zealand’s property market has always been attractive to Australian investors, whether for lifestyle reasons or as a long-term financial strategy. However, securing a home loan as an Australian resident can be more complex than expected. The most important thing to understand is that you cannot use an Australian bank to finance a property purchase in New Zealand. Even though some banks, such as ANZ and Westpac, operate in both countries, their mortgage services are independent, meaning you must secure a loan through a New Zealand lender.
While Australians are in a better position than most foreign buyers due to the close economic ties between the two nations, they must still meet New Zealand's lending criteria. NZ banks assess income, deposit size, and property type before approving loans, and borrowing as a non-resident may require additional documentation. Understanding these rules is crucial before starting your property search, as financing options differ significantly from those available in Australia.
Why You Cannot Use an Australian Bank for a New Zealand Home Loan
Australian banks and New Zealand banks operate under separate financial and legal systems, meaning that even large institutions with a presence in both countries do not offer cross-border mortgages. For example, while ANZ operates in both Australia and New Zealand, its lending arms are entirely independent, and an Australian ANZ home loan cannot be used to buy property in NZ. This separation exists because banks need legal control over the property they finance, which becomes complex when dealing with assets in a different country.
Additionally, banking regulations in New Zealand are governed by the Reserve Bank of New Zealand, while Australia’s financial system falls under APRA (Australian Prudential Regulation Authority). Since mortgage rules, security laws, and interest rate policies vary between the two countries, Australian banks are unable to issue home loans for New Zealand properties. Even if you have an existing relationship with an Australian bank, you will still need to go through a New Zealand lender if you require financing.
How to Get a Home Loan in New Zealand as an Australian Resident
The best way for Australians to secure a home loan for New Zealand property is by applying directly with a New Zealand bank. Major lenders such as ANZ New Zealand, Westpac NZ, ASB, BNZ, and Kiwibank offer mortgage products to non-residents, including Australians. While lending policies differ between banks, you will generally need a 20-30% deposit, provide proof of Australian income, and potentially meet stricter serviceability criteria. Some banks apply additional buffers to foreign income to account for currency fluctuations, which may impact borrowing capacity.
Another way to finance a New Zealand property is to use equity from an Australian property. If you own a home in Australia, you could refinance your existing mortgage and use the released funds to purchase in New Zealand without requiring an NZ mortgage. This option provides greater flexibility but also comes with risks, such as increasing your debt load on your Australian property. Before choosing this route, it’s important to assess affordability and consult a mortgage broker experienced in NZ property investments.
Legal and Tax Considerations for Australians Buying in NZ
One of the key benefits of being an Australian citizen is that New Zealand’s foreign buyer restrictions do not apply. In 2018, New Zealand introduced a ban on foreign home buyers, but Australians (along with Singaporeans) are exempt. This means you can buy property in NZ without needing special approval from the Overseas Investment Office (OIO), which regulates foreign property purchases. However, if you are a non-Australian looking to invest in New Zealand, you may need to obtain OIO approval before proceeding with a purchase. While Australians generally do not need to go through this process, it’s always worth checking whether your residency status or specific property type might trigger additional requirements.
Tax obligations are another critical factor to consider when buying property in New Zealand. If you sell the property within 10 years, you may be liable for capital gains tax under NZ’s Bright-Line Test, unless the home was your primary residence. Additionally, if you earn rental income from an NZ investment property, you may have tax obligations in both New Zealand and Australia. Consulting a tax professional who understands both countries' regulations can help you avoid unexpected liabilities and ensure compliance with cross-border tax laws. Proper tax planning can also help you maximise deductions and structure your investment efficiently.
Conclusion
Australians can purchase property in New Zealand and obtain financing, but it must be done through a New Zealand lender. Australian banks cannot issue home loans for NZ properties due to differences in financial regulations and security requirements. If you need a mortgage, you’ll need to apply with a New Zealand bank or use alternative funding methods, such as refinancing an Australian property to release equity.
Before committing to an NZ property purchase, consider factors such as loan eligibility, deposit requirements, foreign income assessment, and tax implications. While buying property in New Zealand as an Australian is relatively straightforward, understanding the limitations on financing is key to making an informed decision. If in doubt, working with an experienced mortgage broker can help navigate the process and find the best lending options.