"Deposit" means two different things in NZ property. The contract deposit and the bank deposit, and why confusing them causes problems.
In New Zealand property there are two distinct meanings of deposit, and confusing them is a common source of trouble.
The contract deposit is the part payment made to the vendor on entering an unconditional agreement — typically 10% of the purchase price.
The bank deposit is your equity contribution to the purchase — the difference between the price and what the lender will advance, typically 20% for owner-occupiers or 30% for investors under current LVR settings.
Paid to the real estate agency's or vendor's solicitor's trust account, not to the vendor directly. It is generally held for at least 10 working days before release, to allow for disputes.
If the purchaser defaults, the vendor may retain the deposit and pursue further losses. If the vendor defaults, it is refundable.
Some agreements provide for a smaller or staged deposit — this is negotiable.
Needing the contract deposit in cash, on the day, while their equity contribution is coming from a facility that has not yet drawn down. Equity in another property is not cash. Arrange access to the contract deposit before you bid or go unconditional.
A 10% contract deposit is not the same as having a 10% deposit for lending purposes. Someone with a 20% bank deposit still needs to produce the 10% contract deposit immediately, from the same funds.
At auction the deposit is payable on the day. Not next week.
Last reviewed: 1 August 2026 · General information only, not legal or financial advice.
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