Book: Property Law - A NZ Investors Guide
An easy-to-follow guide to real estate law, written by an investor, for investors, Property Law demystifies key legal issues in property transactions - and shows you how to avoid the traps.
Wednesday, March 19th 2008, 12:00AM
by The Landlord
Reviewed by Kathryn Dalglish on behalf of the Good Returns bookstore
Tony Steindle's book Property Law is a comprehensive guide for New Zealand investors. Because property law is changing so rapidly, it is important to keep up with the nasty little traps that pop up when least expected.
Property Law has changed significantly lately, with restrictions being placed on various properties by neighbours, developers, local councils, district plans as well as the law of the land.
This book is excellent for pointing out what needs to be checked out about a particular property, as well as where the information can be found. There are also repercussions that might occur if the property is purchased without deciding how it will fit into your over-all property portfolio.
For someone who is intending to build up a property portfolio, it could be dangerous to launch into buying property without already having your long-term plan roughly drawn out. Many things can affect the wisdom of purchasing a property that may have restrictions on its use and future development. Also, it may be vital to have your purchasing entity established, or GST-registered, before the Sale and Purchase Agreement becomes unconditional.
It is also important to purchase any buy-and-hold properties in a separate entity from development or trading properties. As this area of property law is currently under review, special care is needed.
If you are planning to do alterations on the purchased property, you will also need to look carefully at the uses or restrictions on alterations allowed without special permission by the council, or perhaps by the neighbours. And if you are intending to upgrade premises with an existing use right, you may find that the existing use right may be lost, because the alterations bring it under the current District Plan. When considering purchasing a property that does not comply with the District Plan, you must find out whether the existing use rights apply. It can be costly and time-consuming to find out, but even more costly to find out too late.
It comes as something of a shock to some investors to find that boarding houses, short-term rentals (holiday lets) and managed hotel rooms are treated as commercial properties. One of the really nasty surprises occurs when you have purchased a managed hotel room, or similar, and the initial lease expires. Because it is considered a commercial property, GST must be paid to the IRD by the purchaser on the current market value, even though the initial purchase was zero rated for GST.
These are just some of the issues that may take investors by surprise, and this book is invaluable for making investors aware of the many ways that the unwary purchaser may be caught out.
The proposed change in the tax relief for property investors is an additional reason for being wary and seeking advice.
Tony Steindle's excellent (but rather scary) book covers all areas of investment property, from your first purchase to developing a balanced property portfolio. Good advice early is much better than an expensive mistake later that then needs to be dealt with. “Property Law” is well laid out and written in an easy-to-read style. The main points are well highlighted, and the index makes it ideal for quick reference.
Altogether, "Property Law" is a useful addition to your library if you are interested in property.
Property Law and Property Tax Combo is on special for only $39.95 plus p&p till March 31
Visit Landlords Bookstore www.goodreturns.co.nz/books or call 0800 345 675.
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