If you’re looking to sell your property in New Zealand in 2016, the good news is that there is no such thing as a capital gains tax in New Zealand. Taxes in New Zealand are among the lowest in the developed world, which is why it is such an attractive destination for those looking to invest in international properties.
New Zealand is essentially a country that is dominated by one city. Auckland has 33% of the population of New Zealand and most of the property transactions in the country where foreign buyers or sellers are involved are done in Auckland.
Auckland’s property market is on a different trajectory compared to that in the rest of the country. Here property prices have registered a double digit growth every year since 2005, which is very impressive indeed. But the price growth is real and there is no indication of there being a real estate bubble as yet, as property prices in Auckland are still cheap compared to the other top cities in the world such as Sydney, Melbourne, New York, Paris and London.
Selling property in New Zealand is pretty simple as there are no complicated laws or regulations to take care of. Generally people hire an estate agent based in New Zealand to handle the sale for them. The benefit of hiring an estate agent is that they have extensive contacts across New Zealand as well as among the community of international investors who are interested in buying a house or apartment in New Zealand.
However, estate agents charge a fee amounting to 3.95% of the purchase price of the home. In addition to this, there is a GST (or Goods and Services Tax) to be paid, which takes the estate agent’s fee to 4.44%. Homes that cost over $350,000 are charged at 2% by estate agents, plus GST.
There is an admin fee of $500 that has to be paid, regardless of the value of the property. A deposit of 10% has to be made by the buyer, after which the seller cannot go back on the agreement and sell the property to someone else. The estate agents get earn their commission only after the whole amount of the purchase price is paid to the seller.
While there is no capital gains tax needed to be paid on the sale of the property, even for foreign sellers, the transaction is recorded officially and the records are made available to the authorities should they seek it.
Another way to sell your home in New Zealand is to hire UK estate agents specializing in overseas property. This allows you to benefit from their extensive agent network that exists across New Zealand, Australia, Asia and Europe.
Also, these estate agents are able to market the property far more effectively on the social media, property portals, online forums, at property trade shows, etc. They have extensive contacts with investors from emerging economies such as China and Russia and are experienced in targeting those who are most likely to buy your property in New Zealand.
Sure, you can sell your property privately, without hiring an agent, which spares you of the need to pay the estate agents’ fee, but this is not as simple as it seems. You will then be responsible for your own advertising costs and will need to spend a lot of time and effort on marketing the property. You will need to have a specialized knowledge of the overseas property market, and as well as online marketing, which you may not have. That’s why hiring an estate agent to sell your property in New Zealand is a much better option.