Personal Finance

You don't have to be Peter Thiel to buy a place in New Zealand

Gail Connor Roche, special to
Trump-backer Peter Thiel just became a New Zealand citizen

"I want to make an offer on this property,'' my husband, Richard, said.

He was calling from 9,200 miles away on New Zealand's South Island to describe 10 sheep-dotted acres in one of the world's prettiest countries. The parcel had electricity, water and telephone hookups.

We could build a "bach" (pronounced "batch"), local slang for a getaway cottage, and watch the sun slip behind rolling hills. Palmerston, with a gas station and convenience stores, was five minutes away. A breathtaking South Pacific beach lay just beyond. The clincher was the land's suitability for tree-planting, as Richard, a pilot for 40 years, longed to dig in dirt after a lifetime viewing the planet from a cockpit.

We'd been traveling to New Zealand since the 1980s. Like many Americans, we'd fallen in love with this environmentally responsible, English-speaking nation. But there'd always been stronger pulls to stay put: Jobs, family, money.

Now, like plenty of near-retirees, we had some cash earning minuscule interest, kids who'd moved on and an itch for change. Throw in global terrorism, gun violence and a turbulent U.S. election, and that made staking a claim in a remote, two-island nation inhabited by 4.5 million friendly Kiwis a real possibility.

Even one of President Donald Trump's most high-profile backers, PayPal co-founder and billionaire investor Peter Thiel has a large swath of property there, according to published reports.

Not that New Zealand makes the transition all that easy. Generally, it doesn't grant foreign property owners residency or other special privileges. Long-term visas become more complicated as you approach retirement unless you have millions to invest. (Thiel also appears to have New Zealand citizenship, although how that was obtained is not clear.)

Shopping for property in New Zealand? Here's a checklist:

● Set up a New Zealand bank account. We worked by email and telephone with the migrant banking division of Westpac in Auckland.

● Secure a tax identification number (called an IRD number) from the Inland Revenue Department.

● Hire a lawyer familiar with the region and your goals. We worked with AWS Legal in their Alexandra office.

● Use local real estate agents. Ours were Harcourts in Cromwell and L.J. Hooker in Dunedin.

● Understand visa and immigration requirements. Americans generally get a 90-day tourist visa when arriving in New Zealand. You may have to show a return ticket when you leave the U.S.

● Learn about living in New Zealand. Read the New Zealand Herald and other newspapers to keep up with real estate news and rules for foreign investors.

A housing boom down under has increased the hurdles. Big banks generally have stopped offering mortgages to nonresidents, which makes purchasing more of a challenge as prices have skyrocketed.

In December, the average home value around the nation's biggest city, Auckland, was about $730,000, up 12.2 percent from the year-earlier month. Near Queenstown, a South Island outdoor-adventure mecca, values soared 31.6 percent to roughly $725,000, property website reported.

Waikouaiti, about 10 miles from downtown Palmerston, features this dramatic Pacific Ocean beach and a scenic lagoon.
Photo: Gail Connor Roche

We succeeded — eventually — with perseverance, flexibility and luck. We spent months scouring listing website Trademe and swapping emails with our local real estate broker. Richard opened a New Zealand bank account and started his boots-on-the-ground search in early October. He chose Cromwell, a once sleepy town about 35 miles from Queenstown, where Kiwi friends had moved, partly, to flee high prices.

"Queenstown is like Aspen," Richard said, referring to the tony Colorado resort town. "Cromwell is where the worker bees live."

Yet Cromwell wasn't cheap anymore. Houses we'd seen online in the $215,000-range were fixer-uppers at best. One surprisingly affordable property for tree-farming was littered with rocks and largely "heritage land'' that couldn't be altered. Another big hurdle was the 328-acre size.

Our local lawyer told us foreigners need approval from the Overseas Investment Office to buy 5 hectares (12.36 acres) or more of rural land. We could purchase multiple parcels under that size if they didn't adjoin and didn't run afoul of other rules.

We switched gears and locales. We'd spotted a house on the South Island's east coast that looked good online. In person, it wasn't great. Discouraged again, Richard decided to focus on small plots of land with house-building potential.

He found a real estate agent who had farmed the area. This agent suggested the Palmerston parcel just up the road. The owner had carved pieces off his property to create "lifestyle blocks.'' The remaining two were under the 5-hectare ceiling, but next to each other. We ruled out buying both because of the adjoining-parcel restriction. Richard opted for the marginally larger one. "It's a start," I said when he phoned. "Go for it."

Sold! After scouring online listings and working with local realtors, an American couple bought the land behind this gate on New Zealand’s South Island.
Photo: Gail Connor Roche

We agreed to tackle the bach later. This would give us time to research contractors and landscapers and work with our local governing body, the Waitaki District Council. It issues building and other permits, performs inspections, and regulates zoning and usage. We've learned, for one thing, that we can't farm chinchillas — oh, well.

As for the bach, we're looking at options from a shipping container to splurging on a soup-to-nuts design firm that provides blueprints, secures some approvals and builds your choice of home on your land.

I pictured myself sipping a local pinot noir while Richard dried his muddy boots by the fireplace in our two-bedroom, two-bathroom tiny home. The drawback — the not-so-tiny price of $215,000 and up, plus tax. Then again, we could always park a camper on the site, our lawyer confirmed. A tent might also suffice.

New Zealand property deals move quickly once you learn the ropes. I arrived on Nov. 6, in time to tour the 10 acres and review the paperwork. The map revealed a narrow strip between our parcel and the second, 10-acre one. We discovered the owner had kept this buffer land for a potential right of way; it wasn't part of either block. Since the lots didn't adjoin, we could buy both, our lawyer said. We signed for the first, then bid on the second.

By the end of my 10 days in New Zealand, we'd reached agreements for 20 acres. For the price, about $200,000. Richard transferred cash from his New Zealand bank to our lawyer to pay the seller. We closed on the first property by email from our den on Dec. 15. The date gives us the option of escaping to a Southern Hemisphere summer should the U.S. winter, or political climate, turn nasty. We'll complete the second deal in July.

It should be a good month for tree planting.

— Gail Connor Roche is a writer and editor living (for now) in Bucks County, Pennsylvania. She previously worked as a senior editor at Bloomberg and a news editor and project manager at Dow Jones.