Protect yourself as a foreign buyer of New Zealand property

Protect your property investment

If you’re investing in a property in New Zealand, what protection do you have as a foreign buyer? Is your deposit safe? What if there’s a problem once the building is complete?

As an investor in overseas, off plan property there are two important questions to ask about your investment.  
  1. Is my deposit safe?  
  2. Do I have any recourse if there are problems with my property once it’s complete?

The good news if you’re considering investing in property in New Zealand is that deposits and warranties are covered at nation level, and you’ll enjoy a good level of protection. 


You will usually pay a deposit of 10% on signing the sale and purchase agreement. The deposits are protected as they are held in a trust account by a stakeholder until settlement when it is released to the Developer.

If you’re purchasing an existing property, the deposit is typically paid to the property agent which is required to hold the deposit in its Trust account. 

Buyers should always ensure this is detailed within their contract before signing a Sale and Purchase Agreement.


New Zealand law provides various protection for purchasers of new residential property. All residential building work in New Zealand, no matter how big or small, is covered by the implied warranties set out in the Building Act.

The warranties:

  • last for 10 years
  • apply whether they are stated in the contract or not
  • also apply to work done by subcontractors employed by the main contractor

The implied warranties:

  • all building work will be done properly, competently, and according to the plans and specifications in the approved consent
  • all the materials used will be suitable and, unless otherwise stated in the contract, new
  • the building work will be consistent with the Building Act and the Building Code
  • the building work will be carried out with reasonable care and skill, and completed within the time specified or a reasonable time if no time is stated
  • the home will be suitable for occupation at the end of the work
  • if the contract states any particular outcome and the homeowner relies on the skill and judgement of the contractor to achieve it, the building work and the materials will be fit for purpose and be of a nature and quality suitable to achieve that result
Protection for Foreign Buyers - NZ

12-Month Defect Period

The Building Act also gives purchasers an automatic 12-month repair period from the date of completion. As long as the purchaser provides written confirmation of the defect within 12 months of completion, the contractor must repair it within a reasonable timeframe. If there is a dispute, it is the contractor’s responsibility to prove that the defective work or products are not their fault.

The warranties do not apply if a defect is caused through particular circumstances or negligence.  

If the contractor goes out of business, the buyer is not protected — but they may still have legal rights against the subcontractors.  This emphasises why it is so important to buy from a reputable developer with a good track record.

To understand more about activating the warranties when the warranties are breached, read our Investor’s Guide to New Zealand for more information.  Just email [email protected] for your copy.

There are so many reasons to invest in New Zealand, the level of protection afforded to buyers is just one.  To find our more check out latest informative articles

Don’t forget, when you’re investing in overseas properties you must consider the factors that will impact the performance of your investment. 

Property investment is complex and multiple factors dictate whether a property is a good is investment – it’s not simply about the purchase costs.   Before making a commitment to purchase any property, be sure to run financial models so you have a really clear understanding of the likely performance of your property.    

We hope you found this article useful, read in conjunction with our other articles on investing in New Zealand and this should give you an understanding of the market why we believe there is an opportunity to invest.  We’ve produced articles not just for New Zealand, but also Australia and the UK, so make sure you take the time to consider all your options and make sure your investment is right for you. Check out more articles here.

Important notice:  Proptech Pioneer and its associated companies seeks to provide investors with guides, information and tools, but we cannot guarantee this information to be accurate or perfect.  You use the information at your own risk and accept no liability if you rely on this information.   Proptech Pioneer is not a tax advisor, conveyance, lawyer, financial advisor or mortgage advisor.  You should seek independent advice from independent professionals before making any investment decision