Important to get the GST component right
Generally speaking, GST on a property sale and purchase between two GST-registered entities results in a ‘GST neutral’ position for both the seller and the buyer. It’s essential that the sale and purchase agreement contains the correct wording, particulars and information in respect of the GST position of the parties to the agreement.
If, however, the parties to the agreement have not correctly recorded their respective GST positions, it can result in a situation where a GST liability is triggered. This can mean the seller would effectively receive a 15% reduction of the contracted purchase price (as they may have to return 15% of the purchase price to Inland Revenue). Or, a buyer may end up having to pay an additional 15% on the purchase price if the agreement turns out to be ‘plus GST’.
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Review due in May
The National Environmental Standards for Plantation Forestry (NES-PF) were first proposed in 2010. Following a period of consultation, the Standards came into effect on 1 May 2018, with a review due in 12 months after that (May 2019) to ascertain whether or not they are being successfully implemented.
Ironically, the NES-PF came into effect a month before torrential rain north of Gisborne in the Tolaga Bay area in June 2018. This storm caused flooding which led to tonnes of forestry debris being strewn across farms and blocking rivers. The cleanup was expected to cost around $10 million and to take up to a year to complete. The cost and responsibility for this cleanup is still being determined.
Continue reading “National Environmental Standards for Plantation Forestry”
What is the government proposing?
The Minister for Land Information, the Hon Eugenie Sage, announced on 17 February this year that the ‘tenure review’ of Crown pastoral land under the Crown Pastoral Land Act 1998 (CPLA) would end. She introduced a discussion document entitled ‘Enduring Stewardship of Crown Pastoral Land’ that sets out a number of proposals in relation to Crown pastoral land. Public feedback is sought on:
- The implications of ending the tenure review
- The outcomes the Crown is seeking for Crown pastoral land, and
- What changes should be made to the Crown Pastoral Land regulatory system to achieve those outcomes.
Submissions should be made by 5pm on Friday 12 April 2019.
There are 171 remaining Crown pastoral lease properties covering approximately 1.2 million hectares of Crown pastoral land.
Continue reading “Tenure review of Crown pastoral land to end”
Helping your children – with care
Contributions by family members to the purchase of a property and how this is recorded can affect property ownership. We discuss how you can help your children and, at the same time, lessen the risks to you as parents.
New Zealand houses have never been more unaffordable: in the 1950s to 1980s a house cost two to three times the average household income. In the 1990s it was four times the average, and by the 2000s it was up to six times the average household income. When you add in the fact that households are now far more likely to have two incomes (compared with the single income norm of the 1950s), housing looks even less affordable.
Continue reading “The bank of mum and dad”
The upside (and downside) of downsizing
New Zealand’s ageing population has created a boom for retirement villages, with record numbers being developed. For many looking to retire or slow down, retirement village living is attractive – and it’s not hard to see why. A new apartment or cottage in a secure, well-maintained environment, offering a lock-up-and-leave lifestyle, and providing resort-like facilities such as cafes, gyms, pools, bowling greens, libraries and men’s sheds can be very appealing.
Many clients tell us how happy they are to have made the move, some even say they wish they had done it sooner, but retirement village living is not for everyone. It’s important to think carefully about what this move means for you – both financially, and in terms of your current and future needs.
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The agreement for sale and purchase
Checking the conditions
Given the significant financial commitment involved in purchasing a property, you want to make sure your investment is sound. One way of ensuring that a property is right for you is to include some conditions in your agreement for sale and purchase. If you do so, the purchase will only go ahead if your conditions are met. An agreement with no conditions included is ‘unconditional’ and you are obliged to complete the purchase once the agreement is signed.
Some common conditions that can be included in an agreement are conditions that give you time to sell your existing property, check what restrictions there are on the property’s title, or get a building report before the agreement becomes unconditional.
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Quite different from a fee simple title
New Zealanders love to talk about property. There are a multitude of topics relating to property that Kiwis have an intimate knowledge and understanding about which form the topic of water cooler and dinner conversation. The cross lease is just one of those many topics of conversation.
Traditional land ownership model
When you’re considering buying a house, you don’t envisage a cross lease form of ownership. You think of owning your own slice of land, subject only to the laws of New Zealand, and what your title says you can and can’t do. This form of ownership is called a fee simple title.
A cross lease is not the same as a fee simple title.
Continue reading “Buying a cross lease property”
Overseas Investment Amendment Act 2018 now in force
We covered the Overseas Investment Amendment Bill in Property Speaking’s Spring 2018 edition. The Bill has become law and is now the Overseas Investment Amendment Act 2018 (the OIA Act). It has been in force since 22 October.
The implication for you is that when you next buy residential property, there will be another layer of compliance to be completed before your property purchase goes through.
Continue reading “Changes affecting every buyer of residential land”
How is access granted?
Our ability to access the ‘great outdoors’ in New Zealand is seen as something of a citizen’s right. At times, however, It does conflict with the rights of private landowners when, in order to access the great outdoors, there is a need to cross their private land first.
The question of public access over private land has recently been becoming more of an issue. In particular, groups who are advocating for that access see the acquisition of private land by overseas people as an opportunity to gain more formal access over private land. Historically, New Zealanders have enjoyed a reasonably significant amount of access over private land – often based around relatively informal arrangements.
Public access over private land is a complex topic. This article gives you some background to the law relating to the rights of private landowners.
Continue reading “Private land with public access”
Warmer homes for Kiwis
Low-income homeowners or homeowners in low-income areas could be eligible for the new government grant to assist in keeping their homes warm in winter.
On 1 July 2018 the new four-year government program, Warmer Kiwi Homes, came into effect. Under this initiative the government will cover up to two-thirds of the cost of underfloor and ceiling insulation or, if you have a concrete floor, ground vapour barriers. Warmer Kiwi Homes only applies to homeowners who have a Community Services Card, however, funding help no longer stretches to landlords.
Continue reading “Property Briefs”