Fortune Manning Review New Requirements For Buying And Selling Land

Fortune Manning recently published an article on their website regarding the new law which was passed by the Government in October last year. This new law imposes new requirements on anybody transferring or receiving land in New Zealand to provide a "tax statement" and IRD number at the time of transfer. This bill will affect any transfer of land, and the team at Fortune Manning will need to ask clients for this information when completing the transfer.  Complying with these new requirements may take some time, so people need to bear these in mind when considering buying or selling a property and make the necessary preparations well in advance.

 Any instrument of transfer (a registerable document changing the ownership of a land title) will need to be accompanied by a tax statement providing certain tax information from both the transferor (seller) and transferee (buyer).  This information needs to be held on file by lawyers for a minimum period of 10 years, and needs to be provided by your lawyers to the appropriate government authority. 

As the Fortune Manning team point out here will be penalties for non-compliance, such as where a person gives a tax statement which they know contains false or misleading tax information, or does so with intent to deceive.  The first time a person commits this offence, there is a fine of up to $25,000, but it doubles to $50,000 for the second and subsequent convictions.  This is potentially a huge fine for private individuals, which means a great degree of care needs to be taken when signing a tax statement.

As the writer concludes, “This legislation is brand new and our clients are still coming to grips with these changes.  Complying with these requirements may be time consuming, particularly for people and entities that do not have an IRD number.  Obtaining an IRD number may involve opening a New Zealand bank account, which for a new customer is a complicated process with many hoops to jump through.  We understand that Trusts and similar entitles applying for an IRD number can expect to wait several weeks to receive one.

“For these reasons, if you are considering buying or selling property and are concerned that you may not meet one of the exemptions, you should start satisfying these requirements now.  Similarly, you may want to engage professional advice from your lawyer or accountant in preparing to sell or buy property, to ensure the necessary applications are made in good time, and you have plenty of time available to you in the Agreement for Sale and Purchase.”

For more information on this subject and on Fortune Manning please visit their website at http://www.fortunemanning.co.nz .