Following the 2010/2011 Canterbury earthquakes, certain areas of Christchurch were designated ‘red zoned’. These zones were identified based on significant land damage, risk to life, or the impracticality of rebuilding. Recently, certain ex-red zoned land has started to come onto the market and be sold by the Christchurch City Council. While ex-red zoned land is often priced lower per square metre than other sections, it does carry additional risks which purchasers need to consider.

Key Considerations for Potential Purchasers

Purchasing any land requires balancing good due diligence with the cost and time to complete that due diligence. This is all the more important for ex-red zoned land where, ideally, significant investigations would be undertaken prior to confirmation of the contract. However, even extensive investigations cannot eliminate all post-purchase risks and surprises, so purchasers must be comfortable accepting some risk.

Due Diligence for Ex-Red Zoned Land

Engage an Experienced Property Lawyer to Review the Agreement

Agreements for ex-red zoned land generally favour the Vendor by stating the Vendor will not:

  • Mark land boundaries;
  • Accept liability for incorrect or incomplete information;
  • Guarantee buildability or consent approvals;
  • Ensure services such as drains are connected or functional.

The purchaser’s lawyer can advise on these risks, tailor the agreement to include broad due diligence conditions and allow sufficient time for investigations. They can also secure increased rights of cancelation if findings are unsatisfactory.

Insurance and Finance

It is difficult to mitigate the risk that a purchaser is unable to obtain future insurance prior to going unconditional on the purchase of the ex-red zoned land. Ex-red zoned land is bare land meaning there are no improvements to insure at the time of confirmation of the purchase of the land. Insurers will likely be hesitant to confirm whether they will provide coverage until final plans, engineering reports, and construction details are submitted and possibly completed. While this is a common risk when a purchaser is buying bare land to build upon generally, this risk is increased with ex-red zoned land due to the nature of the land in question.

If the purchaser cannot obtain insurance, they may not be able to borrow from a standard bank to complete the build.

Even if the purchaser can obtain insurance, it is possible coverage is refused in the future, particularly as insurers re-assess their risk profile.

To obtain some clarity on whether insurance is likely to be forthcoming, buyers should notify their intended insurer and lender about the ex-red zoned status and provide all relevant information. Buyers should also work through the relevant risks during due diligence of the property.

Review the Land Information Memorandum (“LIM”)

The LIM details natural hazards, zoning, and drainage locations. It should be reviewed by your lawyer and other relevant experts.

Examine the Record of Title

A lawyer can clarify what easements, covenants, consent notices, or other interests are registered on the title and affect the land’s use or the type of dwelling that can be built.

Engage a Surveyor

Since the Council may not identify the property boundaries, a surveyor can peg the site and locate existing services which may have been removed or disconnected.

Geotechnical Engineer, Structural Engineer, Quantity Surveyor and Builder

Given the higher risk of ex-red zoned land, it is imperative to get a site feasibility assessment completed before the land is purchased.

A geotechnical engineer would provide an assessment of the ground conditions, land suitability, and any additional hazards present on the site such as liquefaction, lateral spread, or contamination. They can also provide advice on ground remediation, and any additional foundation requirements.

A structural engineer can advise on the type of foundations and building recommended for the site conditions identified by the geotechnical engineer.

A quantity surveyor (or builder depending on scope) can provide advice on additional costs associated with the complex site conditions and foundations outlined by the geotechnical and structural assessments.

Planner

The Council may not guarantee they will grant consent to build. A planner can interpret District Plan rules, identify required consents, evaluate likelihood of approval, and advise on documentation needed.

Valuation and Resale

The risks identified above may impact both the value and marketability of the property. Engaging a registered valuer can help assess fair value and predict the completed property’s worth.

Summary

Ex-red zoned land offers potential opportunities, but there are legal, technical, and financial risks associated with such a purchase. These risks should be considered and where possible mitigated (as far as possible) with thorough due diligence by the relevant experts.

 

Our experienced Property team are able to answer any questions that you have and can assist you through the due diligence process. Contact us today for more information.

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The information contained in this outline is of a general nature, should only be used as a guide and does not amount to legal advice. It should not be used or relied upon as a substitute for detailed advice or as a basis for formulating decisions. Special considerations apply to individual fact situations. Before acting, clients should consult their Parry Field Lawyer.

June 2026

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Properties sold by way of mortgagee sale often sell for less than similar properties on the open market. This can make a mortgagee sale attractive to purchasers, particularly those looking for a “bargain” or investment opportunity.

However, mortgagee sales also come with additional risks for purchasers. This article outlines some of the key issues and risks to be aware of, so you can make a more informed decision before buying by way of a mortgagee sale.

What is a mortgagee sale?

A mortgagee sale happens when a property owner defaults on their loan repayments and the lender, called the mortgagee, exercises their right to sell the property pursuant to the terms of the mortgage security registered against the property. The mortgagee does this to recover the money owed to them under the loan agreement secured by the mortgage.

Why are mortgagee sales often cheaper?

Properties that are sold through a mortgagee sale often sell for less than market value due to the fact that the mortgagee is focused on selling the property promptly. The mortgagee is required to obtain the best price reasonably available at the time of sale but is not driven to obtain the absolute best price possible in the same way a regular property owner might be. This means the property may not be repaired, cleaned, staged, or marketed in the same way as a standard sale. The mortgagee is also unlikely to wait for the “perfect” time to sell.

What are the risks of buying through a mortgagee sale?

There are several important risks to understand and consider before buying a property by way of a mortgagee sale:

1. The property is usually sold in its existing state

Mortgagee sale properties are commonly sold in their current condition. This may mean the property is damaged, or services do not work and there is usually no requirement for any repairs to be completed prior to settlement. Essentially, what you see is what you get.

2. The sale agreement will likely favour the lender

The mortgagee’s lawyer will usually prepare the sale agreement in the mortgagee’s favour. This usually includes refusing to provide the standard promises (or warranties) the seller of a property would normally provide a purchaser. For example, the mortgagee will likely not promise that any renovations done to the property have had the required consents or council sign offs, nor promise that the owner has not received notices or claims from third parties about the property.

3. You may receive very little information

The mortgagee may provide little or no information about the property due to the fact that they simply do not have such information. This could include key documents or reports such as a LIM report, building report, EQC information, or other usual due diligence material commonly provided by a seller to a buyer.

4. The property may not be vacant on settlement

It is usual for a seller to promise to provide “vacant possession” on settlement. However, in a mortgagee sale, this promise is usually not provided which can lead to increased costs and stress to a purchaser on settlement, especially if there are items or tenants that remain in the property and refuse to leave.

5. The property may be damaged before settlement

Even if, on settlement, vacant possession is provided, the mortgagee will likely not promise that the property will be left in a good condition. Junk may not be removed and the disgruntled previous owner may have damaged the property. The property is usually at the purchaser’s risk from the time the agreement goes unconditional so, ideally you would obtain insurance from that point, noting this may be difficult to obtain. This is different from the usual position which is that you obtain insurance from the date of settlement.

6. Access may be limited

The mortgagee may not be able or willing to give you access to the property, especially if the owner or tenants are still living there. This may prevent you from determining the condition of the property and arranging and completing due diligence (for example, a building inspection or valuation).

How can you mitigate the risks?

While the risks cannot always be removed, there are steps you can take to reduce them.

1. Speak to an experienced property lawyer early

Get legal advice as soon as possible. A property lawyer can review the agreement, explain the risks, and help you understand what protections, if any, may be available. This can help you decide whether you still want to proceed. Be prepared that their fee will likely be higher than a standard purchase due to the additional risk and work involved.

2. Investigate the property as carefully as possible

You should obtain and review whatever information is available about the property and its services. You should also be prepared for the possibility that you may not be able to obtain the usual information, such as a building report or full access to inspect the property. You will need to decide whether this is a “deal breaker” for you.

3. Check with your lender before committing

Make sure your lender is still willing to lend, despite the limited information and additional risks posed by purchasing at mortgagee sale.

4. Arrange insurance as early as possible

Subject to the terms of the agreement, you will likely need to insure the property from the date the agreement becomes unconditional. If the property is sold by auction, this will usually be from the auction date. Be aware that insurance may be difficult to obtain from this point as you are asking an insurer to insure a property that you do not yet own and there are uncertainties about occupation, access, or damage. If insurance is not forthcoming until settlement but the risk of the property sits with you prior to that, there are obvious financial implications for destructive events including but not limited to earthquakes or fires.

Mortgagee sales can offer genuine opportunities, especially for experienced buyers or investors who may be more comfortable taking on risk. However, any discount in the purchase price usually reflects the added risk. Buying a property through a mortgagee sale requires careful investigation, realistic expectations, and good legal advice before you commit.

 

Our experienced Property team are able to answer any questions that you have and can assist you through the process of buying property. Contact us today for more information.

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The information contained in this outline is of a general nature, should only be used as a guide and does not amount to legal advice. It should not be used or relied upon as a substitute for detailed advice or as a basis for formulating decisions. Special considerations apply to individual fact situations. Before acting, clients should consult their Parry Field Lawyer.

Throughout 2025, the Overseas Investment Act 2005 underwent various amendments to promote global investment and create a more productive economy under the Overseas Investment (National Test and Other Matters) Amendment Act 2025. This article adds to our earlier articles, which outlined the Overseas Investment Act 2005 and how it relates to transactions involving overseas persons and sensitive land.

On the 6th of March 2026, Hon David Seymour released a Ministerial Directive Letter (the Letter). The Letter provided guidance to the Overseas Investment Office (OIO) regarding its administration of the overseas investment regime. We summarise some of the key takeaways and their practical implications below:

Key points:

The Letter sets out aims to retain the scope of the OIO’s screening, while increasing the regime’s efficiency. In particular, the Letter directs the OIO to:

  1. Increase the consent rate of lower risk or less sensitive assets;
  2. Focus resources on high-risk transactions; and
  3. Rely on information provided by investors unless there is reason to question it.

The Letter essentially directs the OIO to adopt a risk-based approach, with only certain transactions requiring the full assessment process (for instance, where there are concerns regarding threats to New Zealand’s national security or public interest).

National Interest Test

The letter also provided guidance regarding how the “national interest test” should operate in practice, which now comprises three stages as follows:

Stage 1: The initial risk assessment to determine whether a full interest assessment is necessary for the transaction. When carrying out this stage, the OIO is directed to minimise compliance costs for investors, imposing a burden “no broader than necessary”.

Stage 2: The national interest assessment, which assesses whether the transaction is likely to pose a risk to New Zealand’s national interest, and if so, whether this can be managed.

Stage 3: Where the minister decides whether to decline a transaction on the basis that it is contrary to the national interest.

How long is the process expected to take?

The Letter set out revised expectations for timeframes under the regime as follows:

  • Assess 80% of stage 1 national interest assessments within 5 working days (excluding time where the regulator is waiting for information from you),
  • Assess 80% of consent applications within half the relevant time frame.

What does this mean for you?

  • It is all the more important that you provide the necessary information from the outset of your consent application to ensure that the OIO can complete an efficient stage 1 assessment. As highlighted above, the indicated time frames do not account for any time the OIO spends waiting for additional information from the applicant.
  • You can likely expect shorter processing timeframes for transactions that are not considered “high risk” under the OIO’s criteria.
  • On the contrary, applications requiring additional scrutiny from the OIO may have delayed timeframes owing to increased investigation. For instance, if the OIO considers:
    • There is a material risk that the asset acquired may be operated in a way that is contrary to NZ’s interest; or
    • If the trust, company or entity in the transaction has a complex or opaque structure.
  • Reduced costs if you are an entity, trust or company that has a positive track record in contributing to New Zealand’s economy, a record of regulatory compliance, and that has previous consents under the regime.

Conclusion

If you are unclear whether your proposed purchase or sale of land may require consent, we encourage you to reach out to us. It is wise to err on the side of caution if in doubt, as a failure to do so could result in costs and other penalties. If you require consent under the OIA, it is best to engage in the process early to reduce the risk of delays impacting your proposed transaction.

Resources: Ministerial Directive Letter

Overseas Investment (National Interest Test and Other Matters) Amendment Act 2025

 

Selling your home is a big step, especially if it has been your family home for many years. For many people later in life, it is more than moving house – it is about moving forward into a new stage, whether that is downsizing, being closer to loved ones, or making day-to-day living easier.

If you are considering selling or Retirement Village living, here are some important things to think about.

Selling Your Home

Take Your Time

Depending on your circumstances, there may be no need to rush. Ask yourself what you want from your next home. Do you want something smaller and easier to maintain? Would you feel more comfortable being closer to health services or family? Having a clear sense of what
matters will help guide your decisions.

The Legal Side

When selling property, a lawyer looks after the legal work for you. This includes:

  • Reviewing or preparing the Agreement for Sale and Purchase, and making sure the terms of the contract and any conditions added work for you.
  • Liaising with the buyer’s lawyer to handle any issues that may arise, work through the buyer’s condition, and prepare for settlement day.
  • If the property is owned by a family trust, drafting and attending to all additional documentation.
  • Managing settlement, including handling funds, repaying and discharging a mortgage, and lodging the official documents with Land Information New Zealand.
  • If you are also buying either another house or an Occupation Right Agreement (ORA), helping the two transactions work together, such as lining up settlement dates.

Choosing Your Next Home

Consider what will suit your lifestyle now and in the years to come. Some people move to a smaller house or townhouse, others prefer a retirement village where support and community are built in.

Looking After Yourself

Leaving a long-time home can be emotional. It may help to involve family in decisions, take time sorting through belongings, and focus on the positive side of what the move will bring.

Reviewing Your Affairs

A move is also a good time to make sure your Will reflects your current wishes, and to consider setting up Enduring Powers of Attorney for property and personal care. Your current Will may also specifically mention the property being sold and require updating.

Retirement Village Living

There is much to consider when choosing a Retirement Village. Our experienced team are able to provide guidance during this process, with advice on:

Types of Ownership

Buying into a Village is different to purchasing a house. You usually have an Occupation Right Agreement (ORA) with the Village. Some Villages are set up with a Unit Title structure. These types of ownership are very different to the standard home.

Fee Structures

Villages have varying fee structures, such as Deferred Management fee percentages, and fixed or variable weekly fees. It is also important to watch for hidden administration fees.

Continuity of Care

One of the things that many people look at when choosing a Retirement Village is continuity of care. As well as independent villas and apartments, which you hold under an ORA, many Villages also have Rest Home, Hospital, and Dementia level care, meaning you may be able to move within the same Village if higher level care is ever needed. Some Villages have care suites which are also held under an ORA. It’s important to understand that moving is subject to availability and Villages vary on the terms of occupation.

 

If you are considering selling your home or a move to a Retirement Village, we encourage you to talk to us early on in the process.

Our experienced team are happy to answer any questions you have – reach out to Associate, Jo Mechaelis-Wall, for advice on Retirement Village law, or Senior Associate, Cora Granger, for advice on Property law.

 

The information contained in this outline is of a general nature, should only be used as a guide and does not amount to legal advice. It should not be used or relied upon as a substitute for detailed advice or as a basis for formulating decisions. Special considerations apply to individual fact situations. Before acting, clients should consult their Parry Field Lawyer.

New regulations have provided an interim fix for residents associations left in limbo by new requirements under the Incorporated Societies Act 2022. But as a temporary exemption, residents associations will still need to consider their future structure.

Background

A Residents Association is a type of incorporated society that exists for the benefit of the community it serves. It might maintain community facilities or common areas, or simply serve as a forum for residents to come together and organise community activities. Some Residents Associations will own common land as well.

Most Residents Associations will be registered under the Incorporated Societies Act 1908, which means that they will need to prepare for and re-register under the Incorporated Societies Act 2022. However, the new Act prohibits surplus assets from being distributed to members where the society is wound up.

This will cause issues for many Residents Associations who own common land, as “winding up” provisions often provide that surplus assets should go to the members. For Residents Associations with common land, this ensures that the residents will get a share in the land when and if the society winds up.

This prohibition is to preserve the principle that incorporated societies should not operate for the financial gain of members. However, for Residents Associations that own common land or other property on behalf of residents, if the association was wound up, residents would lose rights to property they justifiably see as being theirs.

What does the exemption mean for residents associations?

In response to these concerns, a temporary exemption has been made allowing Residents Associations to retain the clause in their constitution that enables distribution of surplus assets to members for the transition period.

The exemption is provided for under the Incorporated Society regulations. Residents Associations will still need to re-register under the 2022 Act by the deadline of 5 April 2026. At the same time, they must also notify the Registrar that the constitution they are submitting retains a clause permitting distribution of surplus assets to members if the association winds up.

The temporary exemption will remain in place until 5 October 2028. During this period, Residents Associations must either amend their surplus assets provisions to comply with the Incorporated Societies Act 2022 or consider an alternative ownership structure.

Time to consider an alternative structure?

Although this exemption does not provide a permanent fix for Residents Associations under the new Act, what it does do is provide time for Residents Associations to consider their options and what the best structure will be going forward.

If your Residents Association is in this situation, let us know – we are happy to support you in considering your options moving forward. For further information on how the requirements under the Incorporated Societies Act 2022 will affect Residents Associations, check out this article.


We help with unincorporated and incorporated societies and answer questions all the time. If you would like to discuss further, please contact one of our team.

Whether you’re looking to buy a house, bare land, or build, there is a lot to consider when purchasing residential property in New Zealand, even before you’ve entered into an agreement or gone to auction. We recommend engaging with legal experts like Parry Field Lawyers at the beginning of your house-hunting journey. We are able to support and advise you at every step of the process.

Why do I need a solicitor?

In New Zealand, all property transactions need to take place through a solicitor or conveyancing professional, as they have special authority to record changes to the legal ownership of properties. Solicitors can also help make sure the further terms in the agreement meet your needs, advise you on the contents of legal documents – such as the property’s title or your loan documents – and assist with navigating any complications that may arise.

When in my house-hunting journey should I engage a solicitor or conveyancing professional?

It is best to engage a solicitor before you sign anything, as this allows the solicitor to review the Sale and Purchase Agreement and make sure the clauses suit your needs. For example, often purchasers would like to make the agreement conditional on matters such as finance, title, insurance, Land Information Memorandum (“LIM”) report, EQC, and building report. Your solicitor can talk you through what these conditions mean, along with advising on any additional conditions the vendor has already included in the agreement.

When should a purchaser engage a solicitor or legal executive when attending an auction?

Engaging a solicitor as early as possible before you attend an auction is important. If you do win at auction, you are bound to complete the purchase of the property (unless you have entered a side agreement with the vendor that says otherwise). This means before attending an auction, you must be confident with all aspects of the property. You must have completed all of your due diligence on the property beforehand and have your finance in place before bidding at auction. This is different to making an offer, where you are able to complete your due diligence within the timeframe agreed upon in the conditions of the agreement.

What costs would we (the client) incur?

Legal fees will depend on the type of agreement you are entering into and how your purchase is structured (e.g. whether you are purchasing as an individual or a family trust). Please feel free to get in touch with Parry Field Lawyers for a fee estimate based on your circumstances. There are various costs in addition to legal fees that you need to consider when purchasing a property, including:

  • Ordering a LIM Report. This depends on the region the property you are looking to purchase is within, although they tend to be around $300 – you may wish to check which region your property is in and check the Council website to find out the exact costs. Please note, the Council do require time (generally up to 10 working days) to process a LIM application and therefore this needs to be considered when making an offer / choosing to attend an auction.
  • Building Report. This is something you are to arrange independent of your solicitor from a suitably qualified tradesperson – if you wish to obtain one.
  • Costs incurred when arranging finance and insurance.
  • Any other costs you consider are necessary in order to be comfortable with the property.

This is my first home – can we use KiwiSaver towards purchasing a property?

Yes, KiwiSaver can be used provided it is your first main home (i.e. you will reside in the property) and you meet particular requirements (e.g. having had KiwiSaver for at least three years). We suggest asking for pre-approval from your KiwiSaver provider to give you more certainty as to whether you are eligible to withdraw your KiwiSaver funds. KiwiSaver funds can be used towards the deposit or towards settlement (the day the ownership of the property changes hands). If you wish to use your KiwiSaver funds towards the deposit, you will need to complete the KiwiSaver First Home Withdrawal application (which can be obtained online) as soon as possible. This is because your KiwiSaver provider may take up to 10–15 working days to process your application (and potentially longer if they require further information). Please note, KiwiSaver funds cannot be used towards the deposit for an auction.

The information contained in this outline is of a general nature, should only be used as a guide and does not amount to legal advice. It should not be used or relied upon as a substitute for detailed advice or as a basis for formulating decisions. Special considerations apply to individual fact situations. Before acting, clients should consult their Parry Field Lawyer.

Retirement and Lifestyle Villages continue to be a popular choice for older people who are looking to downsize and are attracted by the security and support found in a Village. At Parry Field Lawyers, we offer experienced legal advice on purchases in Retirement Villages across the range of villas, units, apartments and care suites.

What are you buying in a Retirement Village?

Most Villages offer an Occupation Right Agreement (ORA) also known as a licence to occupy the unit. An ORA entitles the resident to live in the unit but the ownership is retained by the Retirement Village. The Village also owns and manages the communal areas that you share with other unit owners. Unlike a freehold title the resident does not have full control of the unit and usually cannot use the unit as security for a bank loan.

Because the Village is the owner when the unit comes to be sold most Villages keep the capital gain (or incur any capital loss) made on the resale of the unit. The Village also usually does the redecorating prior to the sale. The timing of the sale funds being paid to you is usually delayed until the new resident has moved in.

Some villages are set up with ownership held by the residents by way of a unit title ownership for example. There are still usually restrictions on who you can sell the unit to, such as age limits.

Deferred Management Fees

On the sale of the unit a percentage fee is deducted from the amount you purchased the unit for, so you do not get the full purchase price back. Villages refer to this fee by a range of terms such as “Occupation Licence Fee”, “Village Contribution Fee” or “Net Management Fee” and in most villages the maximum is currently about 30% of the purchase price.

Other Fees

You will also pay a weekly service fee which may be fixed or may increase over time. If you get additional services in your unit (especially if it is a serviced apartment or a care suite) there will be additional fees for those services.

Retirement Villages Act 2003

Under the current legislation there is a register of Retirement Villages and an independent statutory supervisor. The statutory supervisor monitors the financial position of the Village which must provide annual audited financial statements. The statutory supervisor also holds the deposit you pay until you move into the village. The Act also requires disclosure of ORA terms to you. There is also a mandatory 15 working day cooling off period during which you can cancel after signing an ORA.

Legal advice

It is mandatory for intending residents to have independent legal advice before signing an ORA which means the lawyer witnessing your signature must explain the general effects of the agreement and its implications in an easily understood manner. There is no standard form agreement so it’s important that a review is done for the specific village. It’s also important to make any application conditional on the sale of your existing home if you need those funds to purchase the ORA. We can assist with this advice and encourage you to discuss your plans with us as soon as you start looking at moving to a Retirement or Lifestyle Village.

Partner, Luke Hayward, and Associate, Jo Mechaelis-Wall, specialise in advising on Retirement Village law.

The information contained in this outline is of a general nature, should only be used as a guide and does not amount to legal advice. It should not be used or relied upon as a substitute for detailed advice or as a basis for formulating decisions. Special considerations apply to individual fact situations. Before acting, clients should consult their Parry Field Lawyer.

In New Zealand, residents’ associations have been a common way of managing a common area of land around residents’ houses or units, or sometimes they are used as advocacy and community. In this article we focus on residents’ associations that own or manage property for the benefit of residents. Residents’ associations are often established as incorporated societies, existing for the benefit of their community of residents and to manage an area of common land or facilities.

Due to a change in the law, all incorporated societies in New Zealand will need to re-register to comply with the Incorporated Societies Act 2022. It’s important to note that if an incorporated society does not reregister by April 2026 then it will cease to exist.

When considering re-registration, residents’ associations should take into consideration:

  • If there is a common area used by residents, and who owns this property?
  • Who manages the insurance of the property?
  • Will the current area of the property be subject to change in the future?
  • Are there other obligations and parties we need to consult (i.e. councils, developers).

It’s important to note that if your residents association does own property, it needs to consider whether it would like to re-register – more information here.

If you would like assistance with your residents’ association, please get in touch.

In January 2026, new regulations provided a temporary exemption for Residents Associations under the Incorporated Societies Act 2022. You can read more about this here.

 

We support incorporated societies and regularly answer related queries. If you would like to discuss further, email incorporatedsocieties@parryfield.com and a member of our Parry Field Lawyers team will be in touch.

Part 3: Alternative Pathway Available for Entities Providing Housing

If you have got to Part 3, obtaining charitable status may not be the most viable option for your entity. As mentioned in Part 2 , an alternative pathway is to apply for an exemption through Inland Revenue whereby income derived from your entity will be exempt from tax.10

To be eligible, your entity must:

(a) Be either a trust or a company;

(b) Be registered as a community housing provider (for more on that, see our Community Housing guide);

(c) Not be carrying out its activities for any personal gain or profit;

(d) Ensure that all profits made are to be retained by the entity or either distributed or applied to its beneficiaries or clients, other community housing providers that meet this exemption, tax charities, or organisations with are allowed to receive charitable donations; and

(e) Ensure that those who control the entity cannot personally benefit from the entity’s activities.11

However, you must ensure that no more than 15% of your entity’s beneficiaries and clients have income or assets over particular amounts. Provided your beneficiary or client has never owned property before, then they must just satisfy the income limit requirement. Currently, the income limits are:

(a) Income limit for a single person’s income: ≥$85,000

(b) Income limit for a group of people: ≥ $130,000.12

The asset limit varies depending on where abouts your beneficiary or client will reside in. Currently, the asset limit ranges from $80,000 – $120,000.13

Conclusion

We have helped many groups in this area and have created a free guide for Community Housing providers which is available here.

If you would like assistance in obtaining a tax exemption for your entity, please contact us and we can help you decide which pathway is better suited for your entity.

 

This article is intended for general informational purposes only and does not constitute legal advice. For advice specific to your situation, please contact a qualified legal professional. Reproduction is permitted with prior approval and credit to the source.

 

10Inland Revenue “Community Housing Providers” <www.ird.govt.nz>.
11Income Tax Act 2007, s CW 42B (2).
12At s CW 42B (3), Schedule 34 (1).
13At s CW 42B (3), Schedule 34 (2).

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