What are the transitional rules for moving to the 15% GST rate in New Zealand from 1 October 2010 if you account for GST on a payments basis? The transition rules applying to those on a payments basis are arguably the most complex part of the change to the GST rate. This article helps explain these specific aspects of the transitional rules.
Most readers will know of the changes to the QC and LAQC regimes foreshadowed in the May 2010 Budget. The details announced in the the Budget were very brief.
The May 2010 Budget contained some initial indications of what to expect from the changes to the QC and LAQC rules. In this short youtube video Sybrand van Schalkwyk discusses at a very high level the issues to consider and the important dates to keep in mind.
The rules relating to GST on the supply of land between registered persons is being changed. Broadly, rather than charging GST at 15%, the rate is being changed to 0%. There is much by way of technical detail to understand regarding these changes. This article very briefly considers the transitional provisions that will need to be taken into account. It is necessarily technical. If you have any questions about it, please contact your usual Parry Field lawyer.
The May 2010 Budget contained some initial indications of what to expect from the changes to the LAQC rules. The law has now been finalised, and introduces look through companies (“LTCs”) as a new concept. This short update points out some of the differences that result from the introduction of LTCs. For background on the changes, listen to/read our interview with Craig Macalister from the New Zealand Institute of Chartered accountants on the LAQC changes.
When purchasing a property, it pays to investigate the history of the buildings on the land. If there are no records of building consents having been issued by the council, then at best the buildings may have been constructed without council approval and may not comply with the building code. At worst, they may be dangerous for use and occupation.
The Building Act 2004 (“the Act”) governs all building works in New Zealand. It states that such work must comply with the building code. The code is made up of regulations which prescribe the functional requirements for buildings and the performance criteria they must meet for their intended use.
Before undertaking building work, the owner of the property must obtain approval from a building consent authority. Usually, the building consent authority is the local council. Council approval for building work is known as a “building consent”.
During construction and once construction is complete, the council will inspect the work to ensure compliance with the conditions of the building consent and the building code. If the council approves the work, then it issues a code compliance certificate. It is an offence to carry out any work requiring a building consent if the work is not in accordance with the terms of the building consent. Also, subject to some exceptions, until such time as a code compliance certificate has been issued, it is an offence to occupy the building.
Building consents cannot be issued retrospectively. However, if the work has been completed and a building consent was required but not obtained, then an application to the council for a “certificate of acceptance” may be made. This involves the council inspecting the work to determine if it complies with the building code. If it does, then it may issue a certificate of acceptance. However, such a certificate cannot be issued if the building work was carried out prior to 1992 as the building code was not in existence prior to that date.
It is not uncommon to come across properties where the buildings on the land have been constructed with a building permit or consent but the work has either never been completed, or if it has, the council has not approved it. If the work was carried out prior to 1 January 1993 and provided that the building is not “dangerous” or “unsanitary” as defined in the Act, then the council cannot take any action to require the owner to complete the work in accordance with the original building permit.
The best way to check that there are no unauthorised buildings on a property is to obtain a Land Information Memorandum (known as a “LIM report”) before you buy it. This includes a summary of all records held by the council in relation to the property including details of building permits, consents, code compliance certificates and certificates of acceptance. To protect your position, any sale and purchase agreement you sign should be subject to approval of a LIM report for the property.
It is worth remembering that although the absence of permits or consents may not pose a problem while you live in the property, it may well become a problem once you decide to sell it. For that reason, a LIM report is money well spent. It could save you a great deal more at a later date.
This article is not a substitute for legal advice and you should talk to a lawyer about your specific situation. Please contact Tim Rankin at Parry Field Lawyers (348-8480) timrankin@parryfield.com
“An ounce of prevention is worth a pound of cure.”
For most small businesses, your lease will be one of your most important contractual documents. Get it wrong and the profitability of your business may be seriously affected. Even so it is common for business to sign up agreements to lease without getting legal help. The lawyers at Parry Field have considerable experience in helping tenants to negotiate lease terms that fairly protect the tenant from undue risk and cost.
New Zealand’s Building Act 2004 (“Act”) impacts on vendors selling properties on which building work has been undertaken. Purchasers now often request evidence of compliance with the Act. Parry Field Lawyers provide legal advice on a range of property matters including buying and selling property.
Jet setting, power lunching, deal clinching tycoons. This is how many people perceive company directors, whose every move seems to be splashed across the daily papers. But the reality is that most company directors are Joe & Jane Average, and perhaps their children, Jack and Jill Average, who own and run small, closely held, businesses. Parry Field Lawyers provide legal advice on a range of commercial matters including managing your company.
PHONE: +64 3 348 8480
FAX: +64 3 348 6305
PHYSICAL ADDRESS:
Level 1, 60 Cashel Street
Christchurch 8013, New Zealand
POSTAL ADDRESS:
PO Box 744
Christchurch, 8140, New Zealand
PHONE: +64 3 348 8480
FAX: +64 3 348 6305
PHYSICAL ADDRESS:
1 Rimu Street, Riccarton,
Christchurch 8041, New Zealand
POSTAL ADDRESS:
PO Box 8020, Riccarton,
Christchurch, 8440, New Zealand
PHONE: +64 3 348 8480
FAX: +64 3 348 6305
PHYSICAL ADDRESS:
Level 1, 80 Rolleston Drive,
Rolleston, 7614, New Zealand
POSTAL ADDRESS:
PO Box 8020, Riccarton,
Christchurch, 8440, New Zealand
PHONE: +64 3 755 8673
FAX: +64 3 755 8073
PHYSICAL ADDRESS:
26 Weld Street,
Hokitika 7810, New Zealand
POSTAL ADDRESS:
PO Box 44,
Hokitika 7842, New Zealand
Parry Field Charitable Foundation
© Copyright – Parry Field Lawyers | Privacy Policy