Building a New House in New Zealand
In New Zealand you will find that the legal process for buying land and building a house is well organized and is regulated extremely well to make it an equally fair process for both the buyer and seller. You should read on to discover all you need to know about building a new house in New Zealand.
Buying a Block of Land
In New Zealand it can take just three or four weeks to complete the purchase on a house or on a block of land on which you plan to build your new house. Once a bid has been accepted any last minute offers cannot be considered and so buying in New Zealand is a lot less stressful experience than in several other locations around the world. When you buy a block of land in New Zealand you will hear it referred to as a section and there are several options for building a tailor made home for whatever your needs or wishes may be.
You will notice that most houses in the country are stand alone buildings and that you buy the surrounding land on which the building you are buying sits upon. There are however several types of land ownership so it is very important that you understand exactly what it is that you are buying. There is a useful website full of information on buying and building a home at https://www.consumer.org.nz/topics/building-a-new-home
Important Changes to the Regulations Concerning Overseas Nationals
There are proposed changes to the Overseas Investment Act (2005) that means overseas nationals are unable to buy existing homes or to purchase land for residential use within New Zealand. The changes to this new legislation are expected to be finalized during 2018. These proposed changes will not affect anyone that holds a permanent resident visa and has been living in the country for at least one year or who has been residing in New Zealand at least 183 days out of the past year, anyone complying with those details is still eligible to purchase a home in the country.
The Purchasing Process
In most instances home and land sales in New Zealand are completed using a real estate agent although there are a small number of sales that are completed privately. Whatever way you prefer to complete your purchase it is highly recommended that you first get the advice independently from a lawyer that is experienced in home buying, otherwise known as conveyancing, before you make an offer. If you need to find a lawyer you can look on the New Zealand Law Society website and click on the link of ‘Property’ under the ‘area of practice’ heading.
Costs of Housing in New Zealand
When purchasing a new house it is common practice to barter over the price which a house is on sale for. Property advertisements will usually show one of three values or valuations for a property. These are Rateable Value (RV), Government Valuation (GV) or Council Valuation (CV). The figures used in the valuation are the ones used by the local council when calculating the rates or council tax for that property. The valuations are not registered and they do not reflect the true market value of an individual property.
You will be able to find an overview of the values that are based around actual property sales on the ‘Quotable Value’ website. It covers property profiles district by district including information on the general sale, local population and weather. This website also sells a more detailed report about a specific address based on previous sales in that area.
We have access to free property reports that help work out what a property is worth. These are available on request.
How to Find the Property you want to buy?
A good source for finding properties listed online can be found at TradeMe or other similar property websites. You will find there are listings from real estate agents in addition to private vendors. It is important to remember that some properties will only be listed on the specific website relating to an individual real estate agent or on their brochures that are available within a local area. Here are some useful property sales websites
When buying or building a new home in New Zealand one set of payments that you have to budget for are your rates. This is one big difference between being a homeowner and a tenant, as tenants do not pay rates but homeowners do.
What are Rates?
Rates are a type of ‘tax’ that is set by local councils to pay for local services such as the upkeep of the roads, drainage and other services that are provided by the local authority for the use of the local community. The amount you are liable to pay will vary from place to place but the charge is calculated on the value of the property.
You can find more information about the rates and how much they are likely to be for a particular area by visiting the website of the local council.
Insurance for your New House
Home insurance in New Zealand is calculated on a sum insured basis. This means that should your home have to be re-built the insurer will only pay out the maximum sum that is specified on your insurance policy when you take out the policy.
Should the worst happen and your home needs to be rebuilt you need to have a good idea of the costs involved in replacing your home before signing your insurance policy. The best way to do this is to get a valuation. Most insurers in New Zealand provide links to online calculators for this purpose. You can find more information about this on the website sorted.org
Another important point to remember in New Zealand is earthquake damage. Any damage caused by earthquakes in New Zealand is covered by the Earthquake Commission (EQC). The charges calculated by the EQC are automatically added to the cost of your home insurance policy. To qualify for the earthquake cover by the EQC you must first have your own private home or contents insurance policy.
If you are buying an apartment, insurance for the entire building is normally included in the annual body corporate fee and you pay through the maintenance fee. You should check the details before making a purchase. You will still need to provide your own home contents insurance policy.
There can be substantial differences in the quality and cost of insurance cover. At claim time you need someone in your corner helping you get what you are entitled to which is why we work with our preferred insurance advisers to make sure our clients are well looked after,
Building a new house in New Zealand can be a very complicated task. You should follow all the advice you are given on the legalities of buying a house and the steps to be taken to ensure you are able to buy the home you desire and avoid any serious problems along the way.