NZ Building Answers

What's the difference between freehold and leasehold in NZ?

Updated June 2026

Short answer

Freehold, formally fee simple, means you own the land and everything on it outright. Leasehold means you own the building or the right to occupy, but someone else owns the land and you pay ground rent, which is reviewed periodically. Most NZ homes are freehold. Leasehold can look cheap upfront, but rent reviews and lending limits make it a different decision entirely.

Source: LINZ. Updated June 2026.

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Key facts

Freehold (fee simple) is the most common ownership type in NZ
Leasehold means paying ground rent to the landowner, with periodic reviews
Ground rent reviews can raise outgoings sharply when they reset to current land values
Banks often lend on different terms for leasehold property
The title states the tenure; the lease document holds the detail

Freehold, the default

Freehold means you own the land and the buildings on it outright, subject only to whatever easements, covenants or notices are registered on the title. It is the most common form of ownership in NZ and the simplest: no ground rent, no lease term, no landowner above you. Freehold does not mean unrestricted, though. District plan rules, covenants and easements still shape what you can build and where, so a freehold title is the start of the question, not the end of it.

Leasehold, the one to read carefully

With leasehold you own the right to occupy, and usually the buildings, but the land belongs to someone else. You pay ground rent, and the lease sets out how often that rent is reviewed and on what basis. Reviews are where leasehold surprises people: a rent set decades ago can jump sharply when it resets to reflect current land values.

Leasehold homes often carry much lower asking prices than similar freehold ones. The discount is not a bargain so much as the market pricing in the ground rent, future reviews and a harder resale.

Where leasehold shows up in NZ

Leasehold is concentrated in particular pockets: parts of central Auckland and its waterfront apartments, land held by trusts and other long-standing landowners, and some developments with their own occupation structures. Outside those pockets the house you are looking at is most likely freehold, but never assume. The tenure is stated on the title, and the listing usually states it too, so read both and query any mismatch.

Lending and insurance

Banks treat leasehold differently. Some lend a smaller proportion of the purchase price, some look hard at the remaining lease term, and policies vary between lenders. Talk to your bank or broker before you make an offer, not after. Ask your lawyer to confirm who insures what under the lease as well, since some leases put specific obligations on the person occupying the home.

What to check on a leasehold title

These are questions for your lawyer, and the answers belong in writing before any offer goes unconditional:

The remaining term of the lease
When the next ground rent review falls and how the new rent is calculated
Who the landowner is and what obligations the lease puts on you
What happens to the buildings at the end of the term

Before you hire

Knowing the rules is half the job. The other half is knowing who you're hiring. Check any NZ builder against the public record: company status, licensing and insolvency notices, from the official NZ sources.

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