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Auckland property market brings new laws for all of New Zealand

Friday 12 June 2015

The New Zealand Government has introduced measures in the May budget 2015 to deal with the continual rise in the Auckland property prices. The changes will apply to properties bought on or after 1 October 2015. The main changes are as follows:

  1. Non-residents and New Zealanders buying and selling property other than their family home must provide a New Zealand IRD number as part of the land transfer process;
  2. Non-resident buyers and sellers will be required to provide their tax number from their home country along with current identification such as a Passport;
  3. Non-residents must have a New Zealand Bank Account to get a New Zealand IRD number;
  4. Any gains from the sale of a property within two years of purchase will be subject to New Zealand tax unless the property is the seller’s main home, or the property was inherited from an estate, or is being transferred as part of a Relationship Property settlement.

There is conflicting commentary as to whether these proposed changes will have the required impact on the Auckland property market. It should be noted that the changes apply not only to Auckland but all of New Zealand.

There has been anecdotal evidence for a long time that most of these investors came from China or Asia. As a lawyer I am aware that there has been no process which collects information on the buyers of properties that do not require the approval of the Overseas Investments Office. The New Zealand Government really has no statistics on who has been buying urban properties in New Zealand.

I believe that it is important for New Zealand to know what really are the driving forces behind the property market. This is especially important when the Auckland property market is creating a distortion in our economy which concerns even the director of the Reserve Bank.

In my next article I will update you on the requirement of having a New Zealand resident director for all New Zealand companies.

If you require legal advice, contact Teresa Chan at Teresa Chan Law Limited, Level 3, Westpac Building, 106 George Street, Dunedin 9016, ph. 477 1069, or email teresa@tchanlaw.co.nz  If you are a Mandarin speaker, please ring Xiaoyan Mu at (022) 694 9917.

12 June 2015                                                                                                       

Note: The information in this article is general only. You should seek advice for specific situations.

 

KEYWORDS: non-residents, New Zealanders, IRD Number, Auckland, China, property
Dunedin Shanghai Association property law section ADLS