Buying guide

What is a leasehold property in NZ? Everything you need to know

Owning a property via leasehold works a little differently than freehold. Here’s everything you need to know.

Last updated: 25 February 2026 | 5 min read

AI summary

Leasehold property means you buy the right to occupy a home for a set term but don't own the land, instead paying ground rent to the landowner.

While offering a lower purchase price in prime locations like Auckland's Viaduct, they carry significant risks:

- Unpredictable ground rent hikes during reviews

- Difficulty securing finance (often requiring a 50%+ deposit)

- Limited capital gains and potential to be hard to sell

Thorough due diligence and expert legal advice are essential before purchasing.

What does leasehold mean?

At a glance

Pros and cons of leasehold property
Pros	Cons
Lower purchase price: Generally much cheaper upfront as you aren't paying for the land.	Lower purchase price: Generally much cheaper upfront as you aren't paying for the land.	Ground rent hikes: Costs can spike significantly during periodic rent reviews.	Ground rent hikes: Costs can spike significantly during periodic rent reviews.
Prime locations: Often found in high-demand spots like Auckland's Viaduct or waterfronts.	Prime locations: Often found in high-demand spots like Auckland's Viaduct or waterfronts.	Harder to finance: Banks often require a much larger deposit (sometimes 50%+).	Harder to finance: Banks often require a much larger deposit (sometimes 50%+).
Lifestyle choice: Allows you to live in luxury areas that would be unaffordable as freehold.	Lifestyle choice: Allows you to live in luxury areas that would be unaffordable as freehold.	Limited capital gains: Without land ownership, you miss out on the main driver of property wealth.	Limited capital gains: Without land ownership, you miss out on the main driver of property wealth.
Lower maintenance: If it's an apartment, exterior and common area upkeep is usually managed for you.	Lower maintenance: If it's an apartment, exterior and common area upkeep is usually managed for you.	Ticking clock: The property’s value can drop as the lease gets closer to its expiry date.	Ticking clock: The property’s value can drop as the lease gets closer to its expiry date.