Buying a Home with an Overseas Partner? Why a Trust Triggers OIA Consent | NZ Legal

A couple buys their first home together. One of them is a New Zealand citizen, the other is here on a residence visa but hasn’t been in the country long enough to count as “ordinarily resident” yet. The purchase itself is simple. Then, late in the piece, the accountant suggests putting the house into a family trust. Good advice in most situations. But the trust brings a problem that most buyers never see coming - and it changes everything.

First, the easy part

Where one buyer is a New Zealand citizen and the other holds a residence visa but hasn’t yet become “ordinarily resident” here - broadly, living in the country continuously for 12 months, present for 183 days or more in those 12 months, and tax resident - only the visa holder carries the “overseas person” label. Not the couple. Not the purchase. Just the one person.

That doesn’t make buying impossible. There’s an exemption built for this exact situation. Where the overseas person is buying property that will be relationship property of the couple, and the other partner is a New Zealand citizen, no OIA consent is needed. You buy in your personal names, the exemption is noted, and the deal proceeds. Nothing unusual about it.

Then the trust idea comes up

Asset protection is a sensible goal, and family trusts are a tried-and-tested way to get there. An accountant suggesting one is doing exactly the job they’re paid to do. The catch is that the OIA sits where immigration law meets property law, and that intersection doesn’t usually come up in an accountant’s analysis. No reason it would.

The plan is the standard one: both partners as settlors and appointors (the people who set the trust up and who can hire and fire the trustees), both as trustees alongside a professional trustee company, and both - plus any future children - as beneficiaries. Completely ordinary. And, under the Act, a problem.

Why the trust changes everything

The trust isn’t just a box to hold the house. Under the Act it’s a separate entity in its own right - which means the “is this an overseas person?” question starts again from scratch, this time about the trust itself.

A trust is treated as an overseas person if overseas persons make up more than 25% of its governing body (for a trust, the trustees), or more than 25% of the power to control who sits on that body (the appointors). On the plan above:

• Three trustees. The overseas partner is one of them - that’s 33%. Over the line.
• Two appointors. The overseas partner is one of them - that’s 50% of the power to appoint and remove trustees. Over the line again, on a separate test.

Either one on its own is enough. So the trust is classified as an overseas person. The trust buying the house then becomes an overseas investment in sensitive land - and that needs consent.

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The exemption that covered your personal purchase doesn’t automatically come along for the ride once a trust owns the property.

The exemption doesn’t follow the house into the trust

The exemption covering your personal purchase applies strictly to an overseas individual buying relationship property. A trust is not an individual, and its assets do not qualify as relationship property under the OIA exemption. Because of this, the exact mechanism that made your personal purchase valid no longer applies once a trust owns the property.

Is there another exemption that helps?

Worth a proper look rather than a quick no. But the short answer is no.

• The closest match is the exemption for a New Zealand company buying relationship property. It says company, though - not trust. There’s no equivalent provision for trusts, and that gap is real.
• There are exemptions covering various trust transactions - changing trustees, transfers under a will or estate, and so on. None of them match what’s happening here, which is a transfer from your personal names into a brand-new trust.
• The related-party exemption only works where consent was previously granted under the commitment-to-reside test. Your personal purchase relied on an exemption, not a consent - so there’s nothing for it to attach to.

So what are your options?

Option 1 - Settle in your own names now

Proceed under the personal-purchase exemption as originally planned. Revisit the trust in around 12 months, once the overseas partner has been living here continuously, established tax residence, and qualifies as ordinarily resident. Because this is the family home, there are generally no bright-line tax implications on that later transfer, provided it was used as the main home for more than 50% of the ownership period and the trust deed reflects this continued intent. The trust work isn’t shelved - it just waits.

Option 2 - Apply for OIA consent

The trust can apply for consent under the commitment-to-reside test, with the overseas partner as the qualifying individual. The overseas partner would give a statutory declaration of their intention to live here and become tax resident. The application fee for a trust is $5,800, plus legal fees - and timing it against your settlement deadline is a real consideration.

Option 3 - Restructure the trust (we don’t recommend this)

Remove the overseas partner from the trustee and appointor roles to bring the trust under the 25% threshold. Whether leaving them as a discretionary beneficiary alone tips it back over is arguable - and that’s the trouble. Where the overseas person is going to live in the house and keeps a beneficial interest, the regulator may treat the restructure as a deliberate attempt to get around the Act, which is an offence in itself. The grey area here isn’t a feature; it’s the risk.

What this means for you

The OIA question isn’t answered once at the start of the file and then forgotten. It has to be looked at again every time the plan changes - because when the plan changes, the buyer can change, and the analysis changes with it.

For most couples in a temporary-residency situation, the answer is simple: buy in your own names now, and do the trust once the overseas partner qualifies. For a family settling into their first home, that’s usually no more than a year away. The trust isn’t wasted - it’s just on hold.

The less comfortable version is finding out after settlement that a trust has acquired residential land without the consent it needed. Under the Overseas Investment Act, that can mean a court-ordered forced sale of the property, civil penalties of up to $1,000,000, and potential criminal liability. The transaction itself may be voidable. None of those outcomes are fixable after the fact. A short conversation before settlement is.

Talk to us before you settle

If you’re buying with a partner who’s here on a visa, or you’re thinking about a trust, get advice early - ideally before you enter an agreement, and certainly before settlement. A short conversation at the start of the process is what gives you room to choose. Get in touch with the NZ Legal team.

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This article is general information about buying property through a trust where one purchaser is an overseas person, under New Zealand law as at 9 June 2026. It is not legal advice. Get advice on your specific situation.

Sources

1. Overseas Investment Act 2005Overseas person test for trusts (s 7(2)(f)), commitment-to-reside consent pathway, and anti-avoidance provision (s 43).
2. Overseas Investment Regulations 2005Relationship-property exemption for personal purchases (reg 45(1)(a)), company equivalent (reg 45(1)(c)), trust-transaction exemptions (reg 40), and related-party exemption (reg 58).