Buying and selling of property in New Zealand has always been a cumbersome exercise as it requires several compliances of law and formalities to be met. In this regard, a new legislation called “Land Transfer Amendment Act 2015” was passed which entailed an additional requirement for the transfer of property In New Zealand.
A New Additional Requirement Post 2015 Legislation
Previously, there were already numerous requirements to comply with when a person had to buy or sell a property. In addition to that, pursuant to the new legislation, another requirement of filing a “tax statement” has also been introduced and made mandatory for any sale and purchase of land within New Zealand.
A tax statement must be accompanied with any registrable document which is used for transfer of names from the buyer to the seller. There are several documents which are to be a part of a tax statement. These documents include:
- An IRD Number. You need to apply to the Inland Revenue Department for procurement of your IRD Number. For a New Zealand citizen, both paper application and online forms are available, however, if you reside outside New Zealand, you need to apply through online application and need to have a current New Zealand bank account.
- A Declaration stating if you are or not a tax resident in any other territory other than New Zealand.
- In case if you are not a tax resident within the territory of New Zealand, you might be asked to share the equivalency of your IRD Number within territory you are a tax resident in.
Transfer of Properties of an Entity or Trust
If the transfer of property of a trust or any firm or a registered entity, the person which has the holding of that entity or a trust, would not be able to attach his IRD Number in the tax statement. For such transfers, a separate IRD Number of that particular entity or trust is required to be filled in the tax statement.
There are a few exemptions to the above mentioned requirements which are imposed by virtue of the said new legislation. One confirmed exemption pertains to transfer of main and secondary homes. Since people are inclined to have more homes now-a-days for several other purposes and not just one home which is exclusively for their residence. The law in New Zealand sets out different requirements for both. For example, if a person is getting the name transferred for his second home, the above mentioned requirements do apply, however, if a person is getting his first main home transferred, it is exempt from the new legislation requirements as a “non-notifiable transfer”. However, a restriction has been placed on such transfer that a person can transfer his main home only twice in two years, in case of a third transfer, the exemption is waived and do not apply. Other exemptions which are expected but haven’t been confirmed may include an inherited property, relationship property, etc.
Why Appoint Fortune Manning?
Fortune Manning has a team of lawyers which specializes in Land Law and are always updated with any amendments or changes in law. Our aim is to oblige our clients with the best possible results and to assist them throughout the procedure and filing and review of documents throughout the entire time of transfer of their property.