This article on ‘Property laws in New Zealand: All you need to know’ was written by Pramod Sanap, an intern at Legal Upanishad.
New Zealand is one of the most beautiful countries with an exceptionally vast mesmerizing nature and it is also one of the most peaceful countries in the world. With such grandeur and beautiful nature and also the most peaceful nation ensuring and effectively maintaining the rights of its citizen this attracts numerous people around the world who want to move or purchase property in New Zealand. With the abundant natural resources for self-sufficiency and a high standard of living it has attracted many people around the world.
In this article, we will be discussing property laws in New Zealand. An attempt has been made by the author to understand and analyse the basics of property law in New Zealand.
Law Governing Property Laws in New Zealand
Since the early 19th century, the availability and potential for land ownership in New Zealand have been an alluring attraction for individuals from all over the world. Since then, New Zealand’s economic development and expansion have been fueled by the land market that soon emerged and the riches created by agricultural productivity.
The Property Relationships Act 1976:
The Property Relationships Act of 1976 (often known as the “PRA”) is a crucial item of New Zealand law. Married, civilly united, and de facto partners are all covered by the PRA. For just the context of the PRA, “de facto” refers to cohabitating as a pair. Several considerations outlined in the PRA must be taken into account when assessing whether two persons are cohabitating as a couple.
A fundamental categorization of property serves as the foundation for the PRA. All property is divided into two categories: separate property, which belongs to the owner alone, and relationship property, which is often divided equally between partners or spouses (unless it is dealt with in certain ways that result in the separate property becoming relationship property).
Regardless of which spouse or partner is actually listed as the owner of the property, all property owned by the partners or spouses would be defined as relationship estate or as the separate property of one of the partners or spouses under this classification, which is said to “hover” over the customary property ownership regime.
Relationship property comprises, subject to certain exclusions, the family residence and family chattels whenever obtained, property owned by the couple jointly or in common in equal parts, property acquired after the start of the relationship by either partner/spouse and certain additional property.
Property acquired before the relationship and property obtained from a third party through inheritance, survivorship, gift, or as a beneficiary under a third-party trust are examples of separate property that is not relationship property. Separate property, on the other hand, has the potential to become relationship property if it is combined with it or utilised in certain other ways.
Property Rights and Environmental Policy:
The Te Ture Whenua Maori Act 1993/Maori Land Act 1993 defines Maori land as either Maori customary land or Maori freehold land in Section 129 (subsections 1 and 2). The Act must be taken into account when transferring Maori land. The provisions of Section 129 cover a variety of land statuses. Only once a Maori Land Court order is registered will a piece of land’s status transition from Maori freehold to general land.
Land owned by Maori in line with Tikanga Maori is known as Maori customary land. Maori freehold land is a property whose beneficial ownership has been established by a freehold order issued by the Maori Land Court (MLC). There are many different proprietors of a lot of Maori land, many of whom may be deceased.
Commercial Real Estate in New Zealand:
Commercial real estate can be purchased directly, either by buying the actual property or by purchasing shares or interests in a corporation that controls the property. The most frequent method of purchasing commercial real estate is direct, as an indirect acquisition typically entails accepting the liabilities and other responsibilities of the relevant corporate body.
Due to New Zealand’s comparatively high levels of economic and political stability, openness, absence of corruption, and accessibility to commercial real estate, commercial real estate continues to be a desirable investment for foreign investors.
Foreign direct investment in commercial property is typically welcomed by the New Zealand government. The Overseas Investment Act of 2005 governs foreign investment in New Zealand. According to the Overseas Investment Act of 2005, some real estate investments made by foreigners or their affiliates need the OIO’s approval (OIA 2005).
Individuals, businesses and other corporate entities, partnerships, limited partnerships, unincorporated organizations, trusts, and unit trusts are all included in the concept of “overseas person.” The citizenship or place of residence of the natural person who will eventually own and/or manage the New Zealand property will often determine whether a corporation is an overseas person.
If a person (natural person) is not a citizen of New Zealand or does not regularly dwell in New Zealand, they are considered an overseas person.
New Zealand is one of the most beautiful countries with an exceptionally vast mesmerizing nature and it is also one of the most peaceful countries in the world. Due to New Zealand’s comparatively high levels of economic and political stability, openness, absence of corruption, and accessibility to commercial real estate, commercial real estate continues to be a desirable investment for foreign investors.
There are various property laws in New Zealand some of which we have discussed aforementioned namely the Overseas Investment Act, 2005 (OIA) which mainly regulates foreign investment by individuals, businesses, and other corporate entities, partnerships, limited partnerships, unincorporated organizations, trusts, and unit trusts are all included in the concept of overseas person. Other property laws also have been mentioned which generally deal with the property for families in New Zealand such as The Property Relationships Act of 1976 (often known as the “PRA”).
- Property Rights and Environmental Policy: A New Zealand Perspective; available at: https://www.treasury.govt.nz/publications/wp/property-rights-and-environmental-policy-new-zealand-perspectiv, (last visited on 21 February 2023).
- Commercial Real Estate in New Zealand: Overview; available at: https://uk.practicallaw.thomsonreuters.co, (last visited on 22 February 2023).
- Other laws and legislation; available at: https://www.rea.govt.nz/real-estate-professionals/obligations/other-laws-and-legislation/, (last visited on 22 February 2023).