As Budget 2025 arrives, speculation is swirling about the future of New Zealand’s foreign buyer ban—a policy that has shaped the housing market since 2018 by preventing most non-residents from purchasing residential property. While the government has made no official announcement about lifting the ban, political signals, economic pressures, and surging overseas interest are keeping the debate alive.

The Current Law and Its Origins

The foreign buyer ban, introduced in 2018 under the Labour government, bars most overseas buyers from purchasing existing residential property in New Zealand. The only exceptions are citizens and permanent residents of Australia and Singapore, due to free trade agreements. The policy was designed to address concerns that foreign demand was pushing up house prices and making home ownership less accessible for New Zealanders.

Budget 2025: No Immediate Change, But Speculation Grows

Despite persistent rumours and lobbying from luxury real estate agents and business groups, Budget 2025 did not include an official move to lift the foreign buyer ban. Government ministers, including Prime Minister Christopher Luxon and ACT leader David Seymour, have stated there is “no decision” yet and have cautioned against speculation. Economists and housing market analysts had already predicted that housing policy would be “tinkering around the sides” this year, with the government’s main focus elsewhere.

However, the topic remains hot. High-end real estate agents report hearing from politicians that a reversal is “imminent,” and industry insiders believe a policy shift could be announced outside the budget cycle.

Political Dynamics: Coalition Tensions and Policy Options

The National Party campaigned in 2023 on a promise to relax the ban, proposing to allow non-residents to buy homes worth $2 million or more, provided they paid a 15% purchase tax. This was projected to raise significant revenue for tax cuts. However, the plan was shelved during coalition negotiations after New Zealand First objected.

Since then, Deputy Prime Minister Winston Peters has signalled greater openness to allowing foreign buyers—if linked to broader investment in the country. The government’s recent overhaul of the golden visa program, which has already triggered a surge in wealthy American interest, adds further momentum to the debate.

Golden Visa Surge: Investor Demand and Policy Contradictions

New Zealand’s revamped golden visa program, launched in April 2025, has removed language tests and lowered investment barriers, resulting in a wave of new applications and hundreds of millions in committed investment. Yet, the foreign buyer ban remains a major obstacle for these investors, many of whom want to buy homes as part of their move.

Legal and property experts argue that it is contradictory to invite investors to settle and invest in New Zealand while prohibiting them from buying a residence. They suggest that successful golden visa applicants should be allowed to purchase a family home, aligning immigration and housing policy.

Market Impact and Stakeholder Views

Real Estate Industry: Many agents, especially in the luxury market, are eager for the ban to be lifted, arguing that most foreign buyers target high-end homes and do not compete with first-home buyers. They believe lifting the ban (with a high-value threshold) would boost investment, support new builds, and generate tax revenue.
Economists: Some analysts note that foreign buyers accounted for only about 3% of transactions before the ban, mostly in the luxury segment. They question whether the ban meaningfully improved affordability, as prices continued to rise after its introduction.
Critics: Opponents of lifting the ban warn that any relaxation could reignite a property bubble, put further pressure on supply, and undermine efforts to make housing accessible for locals.
Government: The coalition is divided, with National and ACT more open to change and New Zealand First urging caution or conditions.

What Could Happen Next?

Policy Shift Outside the Budget: While Budget 2025 did not announce a change, the government could still move to relax the ban later this year, especially if it can secure coalition agreement.
Possible Compromise: The most likely scenario is a partial lifting—allowing non-residents to buy homes above a certain value (e.g., $2 million) and/or requiring additional investment in New Zealand’s economy.
Revenue Generation: The government is under pressure to find new revenue sources. Allowing high-value foreign purchases with a stamp duty or purchase tax remains an attractive option.
Alignment with Golden Visa: There is growing support for letting golden visa holders buy homes, which would resolve contradictions between immigration and housing policy.

Conclusion

As of May 2025, New Zealand’s foreign buyer ban remains in place, but momentum for change is building. The government has not made a formal announcement, but political signals, economic logic, and investor demand all point toward a likely relaxation—especially for high-value properties or golden visa holders. The next move may come outside the budget process, as the coalition seeks consensus and weighs the impact on both the housing market and New Zealand’s global investment appeal.