The 3 Biggest Changes for NZ Property Investors This Year.
The 3 Biggest Changes for NZ Property Investors This Year.
For the last few years, buying an investment property in New Zealand felt pretty tough. But in 2025, the game has completely changed.
The rules are now much friendlier for investors, and the market has settled down. If you've been thinking about it, now is a great time to take a serious look.
In this week’s update we’ll dive into the biggest changes and what they mean for you.
The Three Big Rule Changes for Investors
If you take away anything from this article, it's these three points.
1. You Can Claim All Your Mortgage Interest Again
Since April this year, you can claim 100% of your mortgage interest on a rental property as a business expense at tax time.
What this really means: It makes a huge difference to your weekly cash flow. Many properties that didn't make financial sense before, now do.
2. The Bright-line Test is Down to 2 Years
Forget the old 5 and 10-year rules. Now, if you sell a rental property after owning it for at least two years, you generally won't be taxed on the profit.
What this really means: You have much more flexibility if your plans change. It’s less of a long-term lock-in if you need to sell for any reason.
3. Healthy Homes Standards Are a Must-Check
The deadline for all rental properties to be warm, dry, and healthy passed in July.
What this really means: When you're looking to buy a rental, you have to check if it meets the standards. If it doesn't, you'll need to budget for the cost of any required upgrades straight away.
How to Get Started
Feeling ready to take the next step? Here’s the typical game plan.
Step 1: Using the Equity in Your Home
For most Kiwis, the deposit for a rental comes from the value you've already built up in your own home. Banks will usually let you borrow up to 80% of your home's value. The amount between what you currently owe and that 80% mark is what you can potentially use as a deposit.
For an investment property you'll generally need:
A 30% deposit for an existing house.
A 20% deposit for a brand new one.
Step 2: Get the Loan Structure Right (This is the important bit!)
Getting a loan approved is one thing, but how it's set up is everything. A smart structure is about more than just the interest rate; it’s about setting you up for success. This means ensuring you can:
Save on tax: A clean structure makes it easy to claim all the interest you're now allowed to.
Protect your family home: You should avoid tying your home and your rental together as security for the same loan (this is called 'cross-securitisation'). Keeping them separate is a crucial safety step that many people miss.
Putting It All Together
With better tax rules, more flexibility, and a stable market, now is a great time to consider property investment.
The key is to go in with a clear plan. Understanding the new rules and getting your finances set up correctly from the start will make all the difference on your journey.
If you're ready to stop thinking and start planning, I'm here to help. Get in touch if you'd like to have a chat about how this could work for you.
