News & Updates

Recent updates

01-08-2008

Thomas Chin's July Report

TAXATION (International Taxation, Life Insurance, & Remedial Matters) Bill

The Tax Bill was introduced to Parliament on 23 July.

Some of the Bill’s proposed changes may affect some property dealings.

Of interest to property investors and those who are dealing, developing, building (and companies and trusts of relatives) are changes to the “associated persons rule” and especially where they relate to land transactions between “associated parties” and the tax that maybe payable on sales. The Bill also enables IRD to capture trusts that are used inappropriately or to “avoid tax”.

The proposed changes will apply on land acquiring from 1 April 2009 and on profits on land sold within 10 years.

AFFORDABLE HOUSING BILL – Select Committee report

During the month (7 July) the Local Government and Environment Committee presented its report to Parliament on the Affordable Housing: Enabling Territorial Authorities Bill.

In essence, the Bill enables territorial authorities to develop their own definitions and approaches to respond to the circumstances of their particular housing markets.

The Bill defines affordable housing policies as those that promote the provision of housing that can be afforded by low and moderate-income earners taking account of the need for a variety of housing sizes, tenures, and costs.

The Bill does not present any direct implications for the Federation however it does reinforce the current administration’s regulatory program of interventions in the overall housing market. Separately, increased land purchases by Government agencies for low cost leasehold housing properties is being tipped by Government MPs as one of Labour’s pre-election initiatives.

Inquiry into housing affordability- Continuing

The Commerce committee met twice during the month (23 and 31 July) to continue its consideration of the inquiry into housing affordability.

Inquiry into the future monetary policy framework - Continuing

The Finance and Expenditure Committee continued (30 July) its examination of the Reserve Bank and Treasury Supplementary Stabilisation Instruments options (proposed from 2006).

OTHER LEGISLATION – Awaiting first reading

The Residential Tenancies Amendment Bill and the Unit Titles Bill remain on the Government’s business program, however, their first reading has again been stalled. Debate is now not expected until mid-August.

It is expected that the Bill’s will be both referred to the Social Service Select Committee for consideration and the public will be given a 4 to 6 week timeframe to make written submissions.

Also stalled is the second reading of the Real Estate Agents Bill. Recall in the early rounds of the debate the REINZ and others including the National Partyraised some concerns about the lack of regulation of property managers and property management, and the lack of protection for consumers dealing with them. However, it should be noted that the Government has recently stated that it now intends to review the regulation of property management.

Specifically, Clayton Cosgrove Associate Minister of Justice said:

“Although no substantial or robust evidence has emerged to date that a significant problem exists with unlicensed property managers, the Government agrees with the Select Committee and support parties that the high levels of concern from submitters justify reviewing the regulation of property managers in more detail.” (NZ Govt 30 July 2008)

END