In recent years, more people have been buying and selling properties. Did you realise income from property sales is like any other income? You need to pay tax on it.
When do you need to pay tax on a property sale? It all depends on your intention when you bought the property. If you bought a property with the firm intention of selling it when prices rise - to make a gain from the increase in its value - the profit is likely to be taxable. This doesn't mean you need to pay tax when you sell the family home. If you bought a property to provide a family home, any profit from the eventual resale will most likely not be taxable.
It usually comes down to your intention when buying a property. A good test is to ask yourself: "What were my reasons for buying this property?"
To work out your intention, Inland Revenue listen to what you say, and they look at your actions. For example, Inland Revenue may look at your history in buying and selling properties, or at statements you made to a bank manager or advisor when you bought the property. Everyone's circumstances are different, and we consider all the facts on a case-by-case basis.
Inland Revenue looks closely at property transactions over the last five years or so, and they have already identified some of the common errors people make. For example sometimes rental investors move into trading and forget to change their tax position. In other cases, sections might change hands before title is issued, without the seller realising - for tax purposes - property also includes a bare section. In both these cases, any profit from the sale of the property is likely to be taxable, if the property was bought with the intention of reselling it.
If someone doesn't pay their tax, we all miss out. The estimated loss of revenue from undeclared property income is more than $100 Million a year - revenue that should benefit the New Zealand community.
If you think you should have paid tax on the sale of a property but didn't, please talk to Inland Revenue or to a tax advisor.
Your Legal Rights: Trees, Fences and Your Neighbours
Disputes over trees and fences are a common cause of bad feeling between neighbours- trees that block your sun, roots that choke your drains, fences that your neighbours want built or replaced- often at considerable expense.
Your differences can usually be settles with a combination of tact and compromise, but if you are forced into a standoff, legal action may be your only way out. That could cost you anywhere from hundreds to thousands of dollars and will most likely destroy neighbourly goodwill.
If you would like a hardcopy of this information, please contact our Palmerston North office.
The Property Law Amendment Act 1975 says property owners are responsible for any nuisance or damage their trees cause to neighbours, even if the trees were planted before they brought the property. But decide first whether the nuisance is worth the risk of souring relationships with your neighbour. You need to decide too whether that problem outweighs the benefits the trees give you both- such as beauty, privacy, shelter, shade. Try to work out a solution tactfully. Give neighbours time to think about what you are suggesting. They may be quite happy to help you with any work caused by their trees if it means saving them. It’s better to talk over the fence than in a court. If you reach an impasse, you may need to take legal action. If you do, tell your neighbour- how would you feel if you received a court order in the name of your neighbour without warning? Your neighbour may cooperate if there is a legal obligation to do so. If you go ahead with legal action, ask your lawyer to organise a court order. The District Court will then send a notice to your neighbour ordering action to be taken within a set time - or appear in court.
A willow tree's roots on a neighbour's property continually block your drains. Twice in 18 months you have to get a plumber to clear them. He warns you that this will be a regular exercise - and expense - unless the cause of the problem is removed. Even worse, it could eventually cost you new drains. You approach your neighbour about having the tree removed. He indignantly points out that the tree was well established on his property long before you brought the one next door, and he has no intention of removing his tree for you or your drains. Have you any comeback?
DEFINITELY! The law does not accept that a tree planted 30 years ago cannot be "a nuisance" today. If all the facts in this situation were presented in court, the neighbour would probably be ordered to remove the tree.
Some roots of your neighbour's macrocarpa tree start pushing up your carefully manicured lawn. You ask your neighbour to do something about it but she says there is nothing she can do. You then ask to have the tree removed. She is not prepared to do that. You decide to solve the problem by poisoning the roots on your side of the fence. Unfortunately the posion kills the tree and your neighbour threatens to take you to court for damaging her property. Can she do this?
YES. You should have dug up and cut off the roots, or taken court action, rather than use the poison that would lead to the death of the tree. You are allowed to remove any part of a neighbour's property that intrudes into yours. But your right to take action stops at the boundary line between your property and your neighbour's. Using the poison that would have an effect beyond your side of the boundary is illegal.
A neighbour's oak tree continually drops leaves in the guttering of your house, forcing you to climb a ladder every few weeks to get the leaves out. Do you have to suffer this inconvenience?
If the branches causing the problem are growing over your side of the fence, you are allowed to prune them back to the fence. If not, you can ask your neighbour to cut back the trees or remove them. If the neighbour disagrees, you could get a court order to solve the problem.
You buy a section. There is a large chestnut tree growing on the next-door property, with branches growing over onto your side of the boundary fence. The law allows you to cutt off branches on your side, but they are long and thick making it a major operation. Is your neighbour obliged to do the work or pay for it to be done?
NO. Provided the branches are causing no real nuisance, they are your responsibility if they are growing on your side of the fence.
You remove large a branch from a neighbour's plum tree that is growing over your property. This is quite legal, but unfortunately the result of this "amputation" is that your neighbour's tree dies. Can your neighbour demand compensation?
NO. You were within your rights when you cut off the branch on your side of the boundary. It could be argued that any resulting damage to the tree was the neighbour's fault because he did not prune the branch when it was young and the life of the tree was less likely to be affected.
Trees on a neighbour's property are blocking sunlight from your house and garden. Is this a good enough reason to insist they be cut back?
YES. If neighbourly sweet reason fails, then you can take legal action. You will have to convince a court that the trees are having an adverse effect on your property and your enjoyment of it. If the court agrees, the neighbour will have to cut those trees back.
When you bought your home 10 years ago you had a great view from your lounge window. But now a line of trees has grown high enough to block your view completely. the trees are not on your immdeiate neighbour's property but on a property further down the street. Can you do anything about having them cut back?
You would have to approach your local city or borough council with your complaint. If the council has a bylaw or a provisioning it's district scheme, it may accept your arguement and order the trees to be cut back. If not you could take the case to court, but this would be costly and you may not win.
A large conifer growing on the other side of your back fence is obviously dying. You are concerned that at any time the tree, or part of it, could fall on your house. You ask your neighbour to do something about it. He tells you to mind your own business, as the tree is doing no harm and in his opinion is unlikely to fall down on you or your house. But you are not convinced. Can you have the tree chopped down?
Ask your lawyer to apply for a court order to have the tree removed. If the court agrees that the tree is likely to damage your house, the neighbour will have no choice but to cut it down.
Disputes over fences are more clear cut. Your legal rights are covered by the Fencing Act 1978.
You buy a house in a new subdivision. Your neighbour has barely introduced himself when he asks you to contribute half the cost of the fence he has built between your sections. Trying hard to keep your cool you say that you are not obliged to pay because the fence was built before you bought the property, and if anyone should pay it should be the developer. Are you right?
YES. The neighbour can only claim half the cost from you if he has already notified you have he is having the fence built.
A pine tree growing on your neighbour's side of the fence has grown so large that its trunk is now pushing the fence over onto your property. As far as you are concerned this has already made it impossible to plant anything on your side of the fence near the tree, in case the fence topples onto your plants. You complain to your neighbour, but get no joy. The neighbour says the tree is on his property, and apart from any branches that might grow out over your side, it is none of your business. Is he right?
NO. The law is on your side in a dispute involving a plant or a construction on a neighbour’s property which is damaging yours. The cost and upkeep of a boundary fence is normally halved between you and your neighbour, but in this case he is liable for the damage and must repair the fence or compensate you for the damage.
However, the law goes further than this and says that if something is a continuing nuisance- and of course this tree will simply go on growing and pushing over the fence- then the cause of that continuing nuisance must be removed. In this case the neighbour could find he has to lose his tree.
You buy a house in a new subdivision. Your neighbour has barely introduced himself when he asks you to contribute half the cost of the fence he has built between your sections. Trying hard to keep your cool you say that you are not obliged to pay because the fence was built before you brought the property, and if anyone should pay it should be the developer. Are you right?
YES. The neighbour can only claim half the cost from you if he has already notified you that he is having a fence built.
Over the years you have fallen out with your neighbour. The day comes when you realise the fence between your properties needs replacing, and you approach the neighbour about sharing the cost. He slams the door in your face. You decide to go ahead and build the fence entirely at your own expense. But when the contractor begins the job your neighbour tells him that he must not set foot on his property or he will “have him up for trespassing.” Can he do this?
NO. Under the Fencing Act you can go onto someone else’s property if the construction of a fence makes it necessary. But the Act also warns that you must do as little damage as possible to the neighbour’s property, particularly plants.
A storm blows a fence over. Because your neighbour is overseas for 6 months and you want a fence to grow passionfruit and sweet peas on, you go ahead and build a new one at your own expense. When the neighbour comes back you ask him for half the cost of the new fence but he refuses. He says he wasn’t here at the time and had no say in the cost or type of fence that has been constructed. Can you get him to pay half?
YES. The Fencing Act says that if a fence clearly needs repairing or replacing, you can do the job yourself and recover half the cost from your neighbour. A warning though: obviously the new fence should not be something expensive and exotic. A neighbour would have good reason to dispute a half share if what was a fairly ordinary wooden fence has been replaced by a plastered concrete wall topped with Spanish-style tiles!
Your neighbour decides she’d like to replace a hedge with a fence on your shared boundary. She says you should have to pay for half the cost. You tell her that the hedge does a perfectly good job and doesn’t need to be replaced by a fence. You say there’s no way you will agree to it let alone pay anything. Are you within your rights?
Under the Fencing Act you have 21 days to lodge an objection to a neighbour’s proposal for a fence. If you don’t object (to the District Court Register) the fence can be built and you will have to pay half the cost. If you object, the dispute will have to be settled in court- an expensive and usually unpleasant business.
Survey Mark Protection
Thousands of vital marks exist in New Zealand- many are below ground level and invisible to most of us. It is in everyone's interests to take care of survery marks and protect them from damage.
Land Information New Zealand (LINZ) provides a service that helps to preserve the marks. If you're planning works that could disturb survey marks, it's importants that you contact LINZ for help before you begin. LINZ provides a free service to help you avoid the survey marks.
What we need from you
Contact LINZ national office at www.linz.govt.nz or call 0800 ONLINE, well before you start work to provide a plan of proposed works. If no marks are affected then linz will contact you within a few days then you can start work immediately. If marks are at risk, you will receive prints of plans showing you where the marks are and you can either:
- Divert your works to avoid disturbing marks or,
- Contact a Licensed Surveyor to protect the marks by offsetting and replacing the marks.
Why survey marks are important
Survey marks provide a wealth of important information to a wide range of people in the community. They are mainly used to support the surveying of property boundaries, but are also important to engineering, roading, mapping and other land surveys.
WARNING- Disturbing Survey Marks is an Offence
Responsibility for the reinstatement or replacement of marks destroyed or disturbed rests with your organisation under Section 55 of the Cadastral Survey Act 2002. A Licensed Cadastral Surveyor must oversee the reinstatement or replacement to the standards set by the Surveyor-General.
All information has been sourced from the Survey Mark Protection information brochure, April 2003, avaliable from the offices of Pirie Consultants or by contacting Land Information New Zealand
Precise Land Measurement
There are times when your land and the features on, above or below its surface will need to be located. A surveyor professional who has the required training, equipment and skills necessary to efficiently and accurately carry out this task.
Removing the Uncertainty
Knowing the exact level and location of your land and associated features means that any future planning and design can be undertaken with confidence.
When does land need to be accurately measured?
- To establish the correct location of title boundaries
- To assit in the design of a building and to ensure that it is placed on the section correctly
- To certify that a building or structure has been located in terms of a building or resource consent
- To determine the area and prepare a map of a property for planning purposes
- To assist in the design and placement of large civil structures such as bridges, dams, tunnels or roads
- To assist in the design of new subdivisions
- To allow the production of accurate as-built plans
All information has been sourced from the Precise Land Measurement information brochure, avaliable from the offices of Pirie Consultants or by contacting the New Zealand Institute of Surveyors
Land Development Engineering
Have you ever wondered how a bare paddock can be turned into a network of roads, drains and cables that can support a vibrant community of people? A surveyor is the only professional whose training is directed at understanding and managing this transformation- known as land development.
Creating a Community
Surveyors have many roles in the land development process. They can interpret the laws and rules relating to land development and obtain the necessary consents. They are also involved in placing pegs in the ground to mark out the new sections. More importantly however, a surveyor can work with the natural shape of the land to create a functioning system of roads and services upon which the new community will depend.
A surveyor can undertake the following engineering tasks related to land development:
- Carry out a survey to determine the shape of the land
- Design roads to provide access to the new sections
- Design services (e.g. drainage and water pipes) that use the natural shape of the land to minimise costs while still meeting national and local standards
- Reshaping the land to increase its value and functionality
- Prepare the contractors' documents and measure the quantities of materials needed (and used)
- Supervise the construction of the community to ensure it meets design adn council requirements
All information has been sourced from the Land Developing Engineering information brochure, avaliable from the offices of Pirie Consultants or by contacting the New Zealand Institute of Surveyors
Subdivision of Land
A Subdivision takes place when existing parcels of land are divided into smaller parcels or when an existing boundary is altered.
The Subdivision Process
Subdivision Design and Resource Consent
An NZIS member can discuss your requirements with you adn then design the subdivision and apply for consents from the relevant authorities.
Once the Local Authority has approved the subdivision, your surveyor can assist you to meet any required conditions (such as installing drains to your new section).
The Legal Survey of Subdivision
NZIS members who hold a cadastral surveying license can complete the legal survey and lodge the final dataset that will form part of New Zealand's official survey record with Land Information New Zealand (LINZ).
Issue of Title
When LINZ has approved your surveyor's plans and your solicitor has lodged the required legal documentation, your new titles can be issues.
All information has been sourced from the Subdivision of Land information brochure, avaliable from the offices of Pirie Consultants or by contacting the New Zealand Institute of Surveyors.
Redefinition of Boundaries
A Redefinition Survey may be required to locate the legal boundaries of your property for building consent purposes, before erecting fences, or to determine the extent of a parcel of land before purchase.
Locating Your Boundaries
Knowing the exact location of the boundaires of your land will help avoid expensive encroachment disputes and ill-will between you and your neighbours.
An NZIS member who is a Licensed Cadastral Surveyor can:
- Help resolve existing boundary problems
- Indicate or confirm the correctness of existing boundary marks
- Replace boundary marks which have been removed or disturbed
- Place additional marks to better delineate a boundary
- Prepare legal survey data when necessary to document the location of the boundaries of your land
- Advise you of possible remedies when boundary disputes or encroachments have occurred
All information has been sourced from the Redefinition of Boundary information brochure, available from the offices of Pirie Consultants or by contacting the New Zealand Institute of Surveyors
What are Unit Titles?
Unit title ownership is an alternative form of land and building ownership. Unit titles enable a single block of land to be used simultaneously by several owners in a variety of ways.
Each unit title on a property will include a Principal Unit- this is your primary ownership interest and is generally a specified space bounded by walls, ceiling and floor of a particular building.
It may also include an Accessory Unit- this is any area, such as a car park, garage or garden, specifically set aside for the use of the owner of a principal unit.
Any shared facilities such as common driveways, swimming pools or tennis courts are referred to as Common Property and may be used by all owners.
All of the owners of the units constitute the Body Corporate- the body responsible for management of the property. The Body Corporate is responsible for a number of duties including;
- insuring the property
- maintaining the proerty
- compliance with local authority requirements
- managing administration funds
If you require further information please contact us at Pirie Consultants, by using the contact form on the left.
All information has been sourced from the Unit Ttiles information brochure, avaliable from the offices of Pirie Consultants or by contacting the New Zealand Institute of Surveyors
Property Ownership and Rights
Land can be held in an number of different forms of ownership and can be subject to a myriad of rights and restricitions. A surveyor is a land professional who understands the rights associated with your property and can therefore help eliminate any confusion.
What form of ownership do I have?
Your land may be owned in a freehold (the most common), cross-lease or unit title, or it may be leased for a fixed period of time.
What other rights are associated with my land?
- There may be easements over or in favour of the land
- The public may have a right of access along a 'paper' road or the edge of a river, lake or the sea
- The property may enjoy riparian rights along a natural water boundary
- The use of part of the property may be restricted by a convenant or consent notice
Where are these rights located?
A surveyor can interpret the land records, provide advice and translate the associated rights onto the ground-where it matters most.
Unlocking the Potential
Understanding the extent and type of rights associated with your land is important
All information has been sourced from the Property Ownership and Rights information brochure, avaliable from the offices of Pirie Consultants or by contacting the New Zealand Institute of Surveyors.