A NEW Zealand man has received the shock of his life after police knocked on his door to inform him he doesn't actually own the house he purchased in 2012 - and they want to confiscate it.

Nigel Rothsay only became aware of the administrative error in December, when police raided his next-door neighbour in the small town of Masterton, about 100km from Wellington, on suspicion of dealing methamphetamine, Stuff.co.nz reported.

In placing a restraining order on the house under the Criminal Proceeds (Recovery) Act, they discovered that Mr Rothsay actually owned his neighbour's property and they owned his. "It's crazy," he told the website. "I still can't believe it. My life has been on hold for months."

The mix-up seems to have occurred at some point during the property transfer when the lot numbers were mixed up, although conveyancing business First Property Legal denied wrongdoing.

Mr Rothsay said despite initial assurances that he owned the property, the council eventually backtracked. "A guy from council turned up and gave me a real fright. The police were right, I didn't own my house," he said.

First Property Legal sent Mr Rothsay a letter in February blaming either real estate agent Harcourts, which sold the property, or the seller's agent, Public Trust. The letter said the houses were initially signed over correctly but then changed two months later because Public Trust told First Property Legal there had been a mistake.

"It's been a huge stress. I'm a builder, but too stressed to work consistently trying to sort it out. I'd like to get back on track," Mr Rothsay said.

A police spokesman told the website they were still trying to remedy the unique situation. "We empathise with the individual and recognise that this is stressful for them," he said. "However, as more than one party is involved, it is taking longer than anticipated to resolve."