Key recent changes to Property Law…

There were many changes in 2018 for property law in New Zealand.  It’s important that those buying and selling are aware of these changes. 

Overseas Investment

One of the most talked-about changes to the law in 2018 was the amendment to the Overseas Investment Act.  All residential land is now classed as “sensitive” under the legislation, which prevents “overseas persons” from buying residential land. 

There are a number of exceptions to this rule, including that Australian and Singaporean citizens can continue to buy residential properties without obtaining consent from the Overseas Investment Office. 

Lawyers are now required to obtain Residential Land Statements that outline the purchaser’s eligibility to buy residential land before completing residential property transactions.  False statements made by purchasers will result in harsh penalties. 

Anti-Money Laundering

This law, originally introduced in 2009, is intended to reduce money laundering in New Zealand, and came into effect for Lawyers, Real Estate Agents and Accountants at various stages in 2018 and early 2019. 

These professions are now required to take steps to identify and risk-assess clients before engaging in any work.  You will find that Real Estate Agents, Lawyers and Accountants are now carrying out similar identification processes as banks. 

Taxation (Bright-line Test for Residential Land) Act 2015

In March 2018 the “bright-line” tax period increases from two years to five years.  This means that buying and selling residential property within a five-year period is likely to result in tax implications for vendors.

In this changing legal environment, it is vital to take legal advice when you are considering buying or selling property.

Laurie Pallett
Senior Registered Legal Executive