Discover how home reversion schemes work in New Zealand. Access your home's equity without taking on debt, while retaining the right to live in your home for life.
Home reversion is a financial product that allows you to sell a percentage of your home to a reversion company in exchange for a lump sum payment or regular income. Unlike a reverse mortgage, you don't take on any debt or pay interest. Instead, you become a part-owner of your property while retaining the legal right to live there for life.
You sell a share of your home (typically 15-45%) but keep living in it rent-free for life. The reversion company owns that share and will receive their percentage when the property is eventually sold.
An independent surveyor values your property at current market rates. This valuation forms the basis for all calculations.
Based on your age and needs, you decide what percentage of your home to sell. Older applicants can typically sell higher percentages.
You receive a lump sum (usually 20-50% less than the market value of that share) or choose regular monthly payments.
You're granted a lifetime lease allowing you to live rent-free in your home. This right is legally protected and transferable.
You continue to benefit from house price growth on your remaining share. You're responsible for maintenance, rates, and insurance.
When the property is sold, the reversion company receives their share of the proceeds, and your estate receives the remainder.
Property value: $800,000
Percentage sold: 30% (due to her age)
Market value of 30%: $240,000
Amount received: $160,000 (typically 60-70% of market value)
Margaret retains: 70% ownership
Reversion company owns: 30%
Reversion company receives: $360,000 (30%)
Margaret's estate receives: $840,000 (70%)
Margaret's gain from price growth: $280,000
Total Margaret received/retained: $1,000,000
| Factor | Home Reversion | Reverse Mortgage |
|---|---|---|
| Ownership | Sell percentage share | Retain full ownership |
| Monthly Payments | None required | None required |
| Debt Creation | No debt created | Compound debt grows |
| Interest Charges | No interest | 6-8% annually |
| Typical Amount | 15-45% of home value | 20-65% of home value |
| House Price Growth | Proportional benefit | Full benefit |
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Independent advice • No debt created • Lifetime tenancy guaranteed