Titles and Ownership

Title and Ownership

Understanding property titles is crucial, as they define the legal ownership of land and the rights you have over it. The most common and straightforward type is freehold, but other options exist. For more detailed information, refer to the government guide: https://www.settled.govt.nz/buying-a-home/finding-a-property/understanding-types-of-ownership/

Freehold

Freehold (or Fee Simple) is the most common and preferred type of ownership. It means you own the land, the house, and everything on it. You have full rights to use, modify, or develop the property—subject to council regulations. Freehold gives you maximum flexibility for future renovations, extensions, or even subdivision.

Strata / Unit Title

Usually called “Strata” or “Unit Title”, these are common for apartment buildings since you won’t own the land itself. A “Strata” title means you own a specific, defined area of a dwelling, and these are generally freehold, but it pays to double check (especially in the Viaduct area). Body corporates and levies usually apply, so make sure you pay extra attention to the supplementary documents that are provided with this.

Cross-Lease

Crosslease means you own a defined or undefined share of land, and the exclusive rights to use part of the land. Read the memorandum of lease carefully as this will tell you what you can and can’t do. Typically for these titles, you can make interior changes, but cannot make any exterior building changes, including extending decks or garden sheds (fixed).

Crossleases are considerably cheaper than freehold titles and can be a good choice for first home buyers under the right circumstances, but when buying, do your due diligence and make sure the flat plans are what you see in front of you – or your future neighbours could ask you to remove your beautiful deck.

Some listings will say Crosslease (Freehold), all this means is the crosslease property is held within a freehold title – so still a crosslease, though you can give the agent some credit that they’re not selling a crosslease property on a leasehold site!

Cross-lease can be advantageous in your favour - if the lease is correct, it means your neighbour who's sharing the cross-lease can't really build multiple houses on their lot, and protects the current setback you have with them. The cheaper prices also mean you get more house for the price.

Some things to watch out for is shared driveways and utilities - if there's a long stormwater pipe for example, you may have to equally contribute to it's maintenance even if it's going to the neighbour behind you.

Investment tip: Buy the other cross-lease later on, or talk to them before buying and see if they're keen to split the cost of title conversion to free-hold. Doing so means both of you can increase the land value of your properties as free-hold, and command a premium at re-sale.

Leasehold

Leasehold properties give you ownership of the building but not the land. Ground rent is usually required, and eventually, the land returns to its owner. Avoid leaseholds as a first-home buyer unless you fully understand the financial and legal implications.

Body Corporates

If you’re buying an apartment or a shared unit, most will have a body corporate to manage common areas. Older apartments often have higher levies due to maintenance, while new buildings may start with lower fees but expect them to rise as the building ages.