Property
The country is now out of its second lockdown with Auckland and parts of the Waikato in Level 3 with the rest of the country sitting at Level 2. Given the current uncertainty with how we can get on top of the Delta strain outbreak, let’s have a look at where this leaves us and our property dealings across differing alert levels.
The Latin word ‘caveat’ literally translates to ‘let him beware’. In a legal sense, caveats are generally used to protect the proprietary rights of the person registering the caveat by stopping the registered owner of the property from transferring, mortgaging or otherwise dealing with the property.
Welcome to the Summer 2021 edition of Property Speaking, and the last issue for the year.
Leases and licences are common contractual arrangements. Although both are similar, there are crucial differences between them which can have significant implications for anyone who owns or occupies commercial premises.
The big ticket items of the government’s recent housing package included the extension to the bright-line test as well as landlords no longer being able to offset their tax with interest paid on their rentals.
In December 2020, a commercial landlord and their tenant found themselves in the High Court arguing about who was responsible for replacing fixtures and fittings because their lease was silent on the issue. These types of disputes around fixtures and fittings in commercial leases are quite common.
In March 2021, the government announced three changes to property tax rules that are likely to affect anyone with residential property investments. The changes include extending the bright-line period from five years to 10 years, changing the main home exemption ‘test’ and removing the ability to deduct mortgage interest from rental income.
The Privacy Act 2020 came into force on 1 December 2020, replacing the Privacy Act 1993. It has introduced new requirements for New Zealand businesses (including farms) and organisations to give greater protections for individuals.
Still fit for purpose for farm ownership and succession?
Trusts have long been the preferred vehicle for farm ownership. Historically, holding a property through a trust meant that ownership did not change on the death of the farmer and, therefore, any death duties could be avoided during the generational change.
Leasing of farms, orchards and cropping land is becoming more common. It is a good way for farming operations to expand without capital commitments involved in buying land. For landowners, it can be a useful way to retain ownership of the capital but give away the day-to-day farming operations, either through a desire to semi-retire or to hold the farming asset for a period while family or continued ownership issues are resolved.