How does overseas income affect your borrowing ability in NZ?

Written by Money Empire

June 18, 2020

The New Zealand property market has been (and hopefully will always be) a brilliant place to invest your money. But when you’re overseas, securing finance from a lender can be a little challenging – even if you’re a New Zealand citizen. 

To make investing in property from overseas easier, check out our quick guide for NZ citizens.

Who can buy property in NZ from overseas?

In 2018, NZ passed the Search Results Overseas Investment Amendment Act, which made it more difficult for non-citizens to buy property here. If you’re not a citizen, you may still be able to buy property here in some cases, including if:

  • You’re a Singaporean national or Australian citizen. 
  • You want to buy an apartment off the plan from a development with an exemption from the Overseas Investment Act. 
  • You apply for and are granted an exemption through the Overseas Investment Office of NZ. 

If you’re a New Zealand citizen, you’re allowed to buy property here regardless of where you live. The hard part for most is securing finance.

How does overseas income affect your borrowing ability? 

Lenders assess income that’s earned overseas a little differently than NZ sourced income:

  • First, they’ll only assess 70% of your gross income to account for tax in your country of residence (even if your tax rate is lower than that). 
  • Then they’ll require at least a 30% deposit to buy an investment property (this is usually the case with NZ-based investors as well).

Each lender tends to have their own unique credit policies on lending to overseas borrowers and will work out your ability to service the mortgage using their own measures. As a result, some lenders may be very strict, making it difficult to secure finance – while others make it much easier. 

That’s why if you’re overseas it’s a good idea to speak to a mortgage broker. We know which lenders make it easy for overseas borrowers and what they need to see on your loan application to approve it. 

If you’re looking to buy property in NZ from overseas, Money Empire can help make it happen. We’ve already helped hundreds of overseas borrowers start building their nest egg here, and would love to help you do the same. Email or call us for a free consultation with one of our mortgage advisors to help you get started. 

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