New Zealand’s housing crisis has long been a source of concern, with skyrocketing prices and limited rental stock leaving many Kiwis struggling to find stable, high-quality homes. While Build to Rent (BTR) has been a successful solution overseas – particularly in the UK, where it has been the fastest-growing source of new housing for nearly a decade – New Zealand’s legislative framework was not initially designed to support such developments.
Recognising this gap, Property Council New Zealand took on the challenge of advocating for regulatory change, working alongside government and industry leaders to pave the way for a thriving BTR sector. Their efforts have led to significant legislative wins, unlocking the potential for large-scale BTR investment and setting the foundation for long-term rental stability.
Laying the Groundwork
The journey to establish BTR in New Zealand began in earnest in March 2021 when Property Council New Zealand facilitated a roundtable summit in Parliament, bringing together key stakeholders, including the Ministry of Housing and Urban Development (MHUD). This led to the formation of a Build to Rent Ministerial reference group, providing direct industry input to government decision-makers.
Recognising the need for greater public awareness, Property Council launched several campaigns, including research demonstrating the potential for 25,000 BTR homes within a decade and the ‘Missed Opportunities Calculator,’ which highlighted the cost of inaction. These efforts underscored the urgent need for legislative change to allow BTR to flourish in New Zealand.
Legislative Milestones
A significant breakthrough came in August 2022, when the government introduced legislation formally recognising BTR as a distinct asset class. This change reinstated interest deductibility for BTR developments, providing much-needed financial incentives. By March 2023, the bill had passed into law, marking a crucial step in the sector’s development.
At Property Council’s March 2023 conference, Housing Minister Hon Dr Megan Woods publicly acknowledged the instrumental role of Property Council’s BTR taskforce in shaping government policy. However, despite this progress, barriers remained—particularly around foreign investment and depreciation rules.
Unlocking Investment: The Next Challenge
Recognising that large-scale BTR developments require substantial capital investment, Property Council New Zealand continued its advocacy efforts. The primary focus was on the Overseas Investment Act, which restricted foreign capital from entering the sector. Without overseas investment, the growth of BTR in New Zealand risked stagnation.
The newly elected government, under Housing Minister Hon Chris Bishop, responded swiftly. In March 2024, as part of its 100-day plan, the government announced its intention to amend the Overseas Investment Act to facilitate foreign investment in BTR. This was followed by a Ministerial directive providing immediate certainty to investors.
A Game-Changer for Build to Rent
On 20 February 2025, Parliament passed the Overseas Investment (Build to Rent and Similar Rental Developments) Amendment Bill. The legislation introduced a ‘large rental development outcome test,’ streamlining the investment process, addressing liquidity issues, and sending a clear signal that New Zealand was open for BTR investment.
“For years, we have seen the sector struggle to gain momentum due to regulatory uncertainty and barriers to international capital. Today’s decision changes that,” said Property Council Chief Executive Leonie Freeman.
BTR, designed to offer professionally managed, long-term rental housing, has seen slow but steady growth since its formal recognition in 2023. However, this latest legislative shift is expected to accelerate development significantly.
The Road Ahead
While the passing of the Amendment Bill is a monumental achievement, Property Council remains committed to further refining policy settings. Key areas for future focus include introducing depreciation allowances for BTR fit-outs, clarifying GST rules for service levels and amenities, and ensuring the Residential Tenancies Act appropriately reflects the unique nature of BTR communities.
The success of the BTR movement in New Zealand highlights the power of industry advocacy and collaboration. Through the tireless efforts of the Property Council Advocacy Team and the BTR Member Taskforce – particularly Paula Ormandy of Buddle Findlay and Paul Winstanley of JLL – New Zealand is now better positioned to capitalise on a new era of rental housing. This progress will provide Kiwis with greater choice, security, and quality in their rental options.