How to Start a Property Investment Group in New Zealand

As property prices remain high, some buyers in New Zealand are looking beyond solo ownership. One option is forming a property investment group, where several people purchase property together under a shared ownership structure.

This approach can allow access to property that may be difficult to achieve alone, but it also requires careful planning, clear agreements, and an understanding of legal and financial responsibilities.

This guide builds on our overview of shared property ownership in New Zealand and focuses specifically on how property investment groups are commonly set up.

What a property investment group actually is

A property investment group is a group of two or more people who combine money, skills, and decision-making to buy and manage property together.

Instead of one person funding the deposit and mortgage, the group shares financial responsibility and ownership according to agreed proportions.

Property investment groups may also be referred to as group property investment, joint property investment, or property investment clubs. While the terminology varies, the underlying concept is the same.

It usually includes:

• Two or more people with a shared investment objective

• Combined deposits and shared ongoing contributions

• A defined ownership structure such as individuals, a company, or a trust

• Written rules covering decisions, profit sharing, and exits

• A plan for holding, selling, or potentially expanding the investment

Groups often form to:

While pooling resources can make property more accessible, shared investing also introduces relationship and decision-making risks. For a realistic breakdown, see the pros and cons of investing with friends.

• Increase buying power

• Share financial responsibility

• Spread risk across multiple people

• Access property types or locations out of reach individually

• Invest collaboratively over the long term

How a group differs from buying with one partner

Buying property with one partner generally involves fewer opinions and simpler administration. Property investment groups involve more people, which increases the need for clear rules around ownership, voting, and exits.

Groups also tend to think more strategically over time and may plan for more than one property or a longer investment horizon.

Potential benefits of a shared investment structure

These benefits depend on how the group is structured and how well expectations are aligned.

• Combined deposits: Pooling funds can increase the group’s purchasing power

• Shared costs: Mortgage repayments, rates, insurance, and maintenance are divided

• Broader borrowing capacity: Combined income may support higher lending, subject to lender assessment

• Wider skill sets: Members may contribute research, budgeting, project management, or property knowledge

7 steps to start a property investment group

Setting up a group works best when you follow a clear process and use the right legal structure from the beginning.

1. Agree on a shared investment goal

The group should define what success means. Some groups focus on long-term rental income, others on capital growth or renovation projects. Agreeing on timeframes and objectives helps avoid conflict later.

Take Note: Make sure everyone agrees on how long you will hold the property and what success looks like.

2. Decide how much each person will contribute

Clarify how much each person will contribute to the deposit, ongoing costs, and future expenses. Unequal contributions are common and acceptable, provided they are clearly recorded.

3. Choose your ownership structure

Work out whether you will buy as individuals, form a company or set up a trust. If you buy in personal names, you usually become tenants in common under the Property Law Act 2007.

If the group becomes large or involves passive investors, it may fall under the Financial Markets Conduct Act 2013, which governs managed investment activity. Legal advice should be seeked to confirm this.

4. Create a written group agreement

A formal agreement should cover:

• Ownership shares

• Decision-making processes

• Voting rules

• Profit distribution

• Exit provisions

• Responsibilities for repairs and management

While not legally required, this agreement is strongly recommended.

5. Set up a shared bank account or tracking system

A shared bank account or clear accounting system helps track contributions, expenses, and repayments. Transparency supports accountability and simplifies lending and tax reporting.

Always remember: Transparency also helps when applying for lending or preparing tax returns.

6. Apply for lending together

Banks assess group borrowers collectively. Most lenders apply joint and several liability, meaning each borrower is responsible for the full loan if others cannot pay. 

7. Begin the property search with agreed criteria

Before searching, the group should agree on suburbs, budgets, property type, and renovation expectations. Assigning roles helps keep the process organised.

Legal and financial considerations you cannot skip

Here are the key legal and financial points every group needs to understand before buying together.

Ownership shares and title structure

Most property investment groups use a tenants in common structure, allowing unequal ownership shares to be recorded on the title. This is suitable where contributions differ and ownership percentages need to remain flexible.

New Zealand recognises two ownership forms: joint tenancy and tenants in common, each with different legal outcomes.

As the Law Association notes, “shared ownership in New Zealand fundamentally takes two legal forms: joint tenancy and tenants in common.”

Tax rules and bright-line considerations

The bright-line property rule applies to the property itself, so every co-owner is affected if the group sells within the required timeframe. Inland Revenue explains that the bright-line test rules in New Zealand begins when the title is transferred and ends when a binding sale agreement is signed. Each person is responsible for the tax on their share of any profit, so the group should plan ahead for how gains will be allocated.

When a group may be a managed investment scheme

A group may be classified as a managed investment scheme when members contribute funds and rely on another party to generate returns without day-to-day control.

Section 9 of the Financial Markets Conduct Act 2013 explains that:

This applies when investors do not have day-to-day control over how the scheme operates. 

A small group buying property directly is usually exempt, but larger or manager-led arrangements may trigger the disclosure and registration rules set by the Act.

Taking the next step with confidence

Starting a property investment group can be a practical option for some people when buying alone is no longer realistic. Success depends on how well the group plans, documents agreements, and manages change over time.

If you want guidance on how a property investment group could be structured, the team at Staircase can help you review your options before making a decision book a free consultation here.

Legal disclaimer: This article provides general information only and does not replace personalised legal or financial advice.

FAQs about property investment groups

Can a property investment group buy more than one property?

Yes. A property investment group can buy multiple properties in New Zealand. Banks assess total borrowing capacity, existing debt, and cash flow. There are no legal limits, but responsible lending rules and financial viability apply.

Can a group change ownership shares later on?

Yes, but with formal legal and lender approval. To change ownership shares:

• The property title must be updated via LINZ (Land Information New Zealand),

• The ownership agreement must be amended,

• Lender approval is required since it affects loan security.

This process may trigger legal fees, and in some cases, tax consequences like deemed disposals for Brightline or GST purposes.

Is it possible to add someone new to the group after buying?

Yes, but it requires bank and legal approval. Banks may reassess the loan as if it's a new borrowing, which can affect interest rates or terms.