The arbitrage is real, the tax haven is not
A Stuff feature published this week profiled Kaveen Jayawardena, a 37-year-old Australian healthcare IT professional who owns seven rental units in New Zealand and intends to keep buying. His first purchase was a Whanganui house in 2018 for $150,000. One man’s property portfolio is not the story. The structural pull that made him possible is.
Three forces are converging to make New Zealand look cheap to Australian capital. Prices have corrected hard, NZ transaction costs are a fraction of Australia’s, and the Australian market itself is softening. For local investors bruised by half a decade of policy churn, the timing is galling.
Why the maths favours a Sydney buyer
New Zealand median house prices are down more than 15 to 16 percent from their late 2021 peak, with Wellington off 27 percent. The average NZ house sits around $800,000 NZD against roughly $1 million AUD across the Tasman. Convert Australian dollars into a weak Kiwi one and the capital stretches further again.
Then there are the frictions New Zealand simply does not have. No stamp duty, no land tax, no comprehensive capital gains tax. Australian investors buying at home face stamp duty of $40,000 to $50,000 per transaction in many cases, plus CGT and state land taxes. As Opes Partners economist Ed McKnight put it, a domestic Australian investor pays “the standard stamp duty, but you pay the higher one because you are an investor, and you pay a higher one again because you’re domiciled overseas, so the stamp duties really start to add up.”
The yield gap is real but modest. Cotality figures put average gross rental yields just 0.2 percentage points higher in New Zealand. But averages mislead. Twine Advisers mortgage adviser Eugene Bartsaikin is blunt: “It’s very difficult to find anything even remotely cash-flow neutral in Australia.” Cotality Australia head of research Tim Lawless says domestic property is “looking quite unattractive” on cyclical grounds, which “is probably motivating people to think about looking at New Zealand.”
The reset local landlords lobbied for
Here is the part that stings. Under the previous Labour government, mortgage interest deductibility was phased out from 2021 and the bright-line test was stretched to 10 years. The current National-led government reversed both, restoring deductibility and cutting the bright-line test from 10 years back to two in 2024. Local investors campaigned hard for exactly these changes, absorbing years of negative cashflow while they waited.
Now the settings have bedded in, and the buyers best placed to exploit them arrive with fresh capital, no legacy debt and no memory of the lean years. Ilse Wolfe of Wolfe Property Coaching reports two to three times the international clients she saw a year ago, with Australians the biggest group. Most never see the properties. “The keen ones,” she says, “might fly over at the end of the renovation to hang the curtains.”
The tax-haven story is largely fiction
A headline in The Australian branded New Zealand a “tax haven” for Australian investors. That framing is doing damage. Mike Reddy, who advises Australians investing here, fields 20 to 30 calls a week from people trying to set up NZ companies or trusts to shelter gains from Australian tax. His verdict is unsparing: “It’s a fallacy, it’s a knee-jerk reaction. It was crap. It doesn’t matter where the company is created, what matters is where it’s controlled from.”
Australian residents are taxed on worldwide income and capital gains regardless of where the asset sits, and the double tax agreement does not swap ATO obligations for lighter NZ ones. Some callers have already built structures and are running into problems. Simplicity chief economist Shamubeel Eaqub adds that the Australian CGT changes are unlikely to drive people across the Tasman for business, because “the chances of creating a successful business are much higher in Australia.”
A repriced market, not a dead one
The NZ market Australians are buying into is being repriced, not revived. Around 15 to 20 percent of Auckland and Wellington properties sold at a loss in the first quarter of 2026, and more than 2,200 construction firms have been liquidated since 2022. Yet investors with mortgages sat behind 25 percent of national sales and first-home buyers 27.5 percent in early 2026. The buyers showing up are simply a different mix.
The investors who do well from here will be the ones buying on fundamentals, entry price, yield and renovation upside, not those chasing a shelter that does not exist. For local landlords, the uncomfortable lesson is that the policy reset they fought for has finally arrived, and cashed-up Australians are among the first through the door.