New build properties receive more favourable LVR (Loan-to-Value Ratio) treatment than existing properties in New Zealand. This policy choice by the Reserve Bank of NZ reflects the government’s interest in encouraging new housing supply. Understanding these rules can significantly change what you can afford to buy or invest in.
Standard LVR vs New Build LVR
| Buyer type | Existing property | New build |
|---|---|---|
| Owner-occupier | 80% LVR (20% deposit) | 90% LVR (10% deposit) |
| Investor | 65% LVR (35% deposit) | 80% LVR (20% deposit) |
The new build exemption provides:
- Owner-occupiers: half the deposit requirement (10% vs 20%)
- Investors: significantly reduced deposit (20% vs 35% for existing properties)
What Counts as a “New Build” for LVR Purposes?
The RBNZ’s definition of a new build for LVR exemption purposes:
Qualifies:
- Properties that have received a Code of Compliance Certificate (CCC) within the last 12 months
- Off-plan purchases — buying a home before or during construction
- Purchasing directly from a developer (first purchaser)
- Newly consented sections with a new build contract
Does not qualify:
- Existing homes resold by owner (even if only recently built)
- Properties more than 12 months post-CCC unless purchased off the plans before CCC
- Substantial renovations or additions to existing properties
Important: The 12-month post-CCC window applies to when the bank assesses the loan, not necessarily when you purchased. If you purchased off-plan and settlement takes more than 12 months post-CCC, check with your lender whether the exemption still applies.
Why New Builds Are Exempt
The RBNZ’s policy rationale: LVR restrictions are designed to reduce risk in the existing property market, not to constrain housing supply. New builds add to housing stock rather than competing for existing stock, and the government has an interest in encouraging construction activity.
Exempting new builds from standard LVR restrictions makes new builds more accessible to both owner-occupiers and investors — creating more demand for new construction and supporting housing supply growth.
Owner-Occupier: 10% Deposit for New Builds
With the new build exemption, an owner-occupier needs only 10% deposit:
| Purchase price | 10% deposit | vs 20% (existing) |
|---|---|---|
| $600,000 | $60,000 | $120,000 |
| $750,000 | $75,000 | $150,000 |
| $900,000 | $90,000 | $180,000 |
The saving in required deposit is significant. Combined with the First Home Loan, eligible first home buyers can purchase a new build with just 5% deposit.
Investor: 20% Deposit for New Builds
The investment property new build exemption changes the investment equation significantly:
| Purchase price | 20% deposit (new build) | 35% deposit (existing) |
|---|---|---|
| $650,000 | $130,000 | $227,500 |
| $800,000 | $160,000 | $280,000 |
| $1,000,000 | $200,000 | $350,000 |
This is why many property investors have specifically focused on new builds — the deposit requirement is dramatically reduced, allowing faster portfolio growth for a given amount of capital.
New Build LVR and Rate Loading
Unlike high-LVR lending for existing properties (where some banks charge a rate premium), new build mortgages at 90% LVR (owner-occupier) or 80% LVR (investor) typically do not carry a rate premium. The LVR exemption means the bank is not using its restricted high-LVR allowance, so there’s no risk-based pricing adjustment.
First Home Loan + New Build Combination
For first home buyers who qualify for the Kāinga Ora First Home Loan:
- Standard First Home Loan: 5% deposit on existing properties up to price caps
- New build First Home Loan: 5% deposit on new builds, typically with higher price caps
The combination of government guarantee (First Home Loan) + new build LVR exemption makes new builds the most accessible homeownership option for income-eligible first home buyers.
As at 2026, Kāinga Ora’s price caps for new builds are higher than for existing homes in most regions — reflecting the higher cost of new construction. Check Kāinga Ora’s website for current caps by region.
Practical Considerations for New Build Purchases
Off-plan timing risk: Buying off-plan locks in the price, but the completed property is valued at the time of settlement. If market values have fallen between signing and settlement, the valuation may be lower than the purchase price, affecting the LVR calculation.
CCC certificate: The 12-month CCC window means if your settlement is delayed (common with developer projects), confirm the LVR exemption still applies.
New build premium: New builds often sell at a premium to equivalent existing homes — partly because developers include a margin, and partly because the NZ market prices the lower deposit requirement. This premium should factor into your value assessment.
Further Reading
- New Build Mortgage NZ — buying a new build property
- Construction Loan NZ — financing a build from scratch
- First Home Loan (Kāinga Ora) — 5% deposit programme
- LVR Restrictions NZ — the full LVR framework
- Investment Property Mortgage NZ — investor guide
- Investment Property LVR NZ — investor LVR rules