Answers to your questions and tools to set you up for property investment success.
A: Yes, using equity from your current home as a deposit is the most common way to get your first rental property. Your ability to do so depends on the amount of equity you have, your income, and the lender's criteria, which includes Loan-to-Value (LVR) restrictions. This method allows you to avoid using your cash savings for the deposit but carries risks, such as potential market downturns and the need to manage increased debt.
A: Turnkey: The purchaser pays a deposit and then one final settlement at completion. It's better for the customers cashflow and easier for the buyer as there aren't interest payments until the build is complete, but TURNKEY FINANCE will often incur an additional fee for the use of the finance facility provided by the building company.
Progress-payment: This loan is drawn in stages as the build progresses. You pay interest during construction, but you have more control over specifications during the build. We’ll talk you through both so you can choose what fits.
A: They’re all options, but the right structure for you depends on tax, liability, estate planning and your long-term goals. There are legal and tax implications for each structure so it’s important to get independent advice from an accountant and lawyer.
In NZ, LTC = Look-Through Company.
It’s a normal company for legal purposes (limited liability, directors, Companies Act), but for tax purposes, the IRD “looks through” the company and taxes the profit/loss in the owners’ hands in proportion to their shareholding—like a partnership.
A: If you sell a residential property any profit will be taxable if it is sold within a set period of time, this timeframe is called "the bright-line".
A: If you sell a residential property within 2 years of your bright-line start date, any capital gain may be taxable (main-home and other exclusions can apply). Applies to properties sold on or after 1 July 2024. Always seek tax advice for your situation. The IRD website has detailed information on bright line rules plus an online property tax tool to help you with your decision making.
A: Yes. From 1 April 2025, you can claim 100% of the interest you pay on loans for residential rental properties as a tax-deductible expense. Between 1 April 2024 and 31 March 2025, you can only claim 80% of the interest. After that, from 1 April 2025 onward, it goes back up to 100%. This is good news for investors as it helps reduce the amount of tax you pay on your rental income. This can improve your cash flow and make investing more affordable. It acknowledges that interest is a running cost of a rental property.
A: No. The new interest deductibility rules apply no matter when you purchased the property or got the loan.
A: Loan-to-Value Ratio (LVR) rules are set by the Reserve Bank of New Zealand (RBNZ) to limit how much you can borrow against a property compared to its value. They’re designed to keep the financial system stable by ensuring homeowners have sufficient equity in their home.
In simple terms, the LVR rules set the minimum deposit banks must require, but banks can still apply their own criteria on top.
A: Debt-to-Income (DTI) rules are lending restrictions introduced by the Reserve Bank of New Zealand (RBNZ) to promote financial stability and reduce risky borrowing. They work by limiting how much you can borrow for a mortgage based on your income.
These limits don’t mean you can’t borrow above them, but banks can only allocate a portion of their lending to higher-DTI loans. Currently, banks are allowed to have up to 20% of new lending exceed these thresholds (for both owner-occupiers and investors). Whether you fall into that 20% is at the bank’s discretion, and they’ll still apply their own affordability and servicing tests. Debt to Income rules explained
A: It’s the NZ Governments way of supporting new housing construction to increase supply and improve affordability. NZ has had a long-term housing shortage, so these policies are essentially channelling demand into brand-new housing rather than existing stock.
A: For the Reserve Bank of New Zealand's Loan-to-Value Ratio (LVR) restrictions, a "new build" is a residential property that is either under construction and financed with a construction loan, or a fully completed new-build dwelling purchased from a developer within six months of its completion. This definition applies to both owner-occupiers and investors, allowing for exemptions to the LVR requirements.
A: No, new builds do not automatically meet the Healthy Homes Standards. While they are built to the Building Code, which often incorporates aspects of the insulation standard and is generally more stringent, the Healthy Homes Standards are a separate set of regulations that must be individually assessed and met. You'll need to arrange for a Healthy Homes assessment to ensure all requirements for heating, ventilation, insulation, draught stopping, moisture, and drainage are satisfied. Landlords must still document full compliance before renting.
From 1 July 2025, all private rentals must comply with Healthy Homes standards.
A: A signed statement showing the property’s current level of compliance with Healthy Homes. Penalties can apply if you don’t meet the requirements.
Property Investor Calculators
Let's not reinvent the wheel, here's a short-cut to all the calculators we find helpful:
Tenancy Services
There is a wealth of information on the Tenancy Services website for landlords, investors and tenants alike. Our favourite resources for investors are:
Read next: Why experienced property investors Christine and Leo always use new builds to build their portfolio.
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