HomeReportsInvestment Climate Statements...Custom Report - b2af13567f hide Investment Climate Statements Custom Report Excerpts: New Zealand Bureau of Economic and Business Affairs Sort by Country Sort by Section In this section / New Zealand 5. Protection of Property Rights New Zealand 5. Protection of Property Rights Real Property New Zealand recognizes and enforces secured interest in property, both movable and real. Most privately owned land in New Zealand is regulated by the Land Transfer Act 2017. These provisions set forth the issuance of land titles, the registration of interest in land against land titles, and guarantee of title by the State. The Registrar-General of Land develops standards and sets an assurance program for the land rights registration system. New Zealand’s legal system protects and facilitates acquisition and disposition of all property rights. The Land Transfer Act – which was enacted in November 2018 and repealed the Land Transfer Act 1952 – maintains the Torrens system of land title in which land ownership is transferred through registration of title instead of deeds, a system which has been in operation in New Zealand since the nineteenth century. The new Act aims to improve the certainty of property rights, modernize, simplify and consolidate land transfer legislation. It empowers courts with limited discretion to restore a landowner’s registered title in rare cases, in the event of fraud or other illegality, where it is warranted to avoid a manifestly unjust result. The Act includes new provisions to prevent mortgage fraud, to protect Maori freehold land, and to extend the Registrar-General’s powers to withhold personal information to protect personal safety. As mentioned in Section 2, overseas persons wanting to purchase certain types of land must apply to the OIO for approval. Land leasing by foreign or non-resident investors is governed by the OIO Act. About eight percent of New Zealand land is owned by the Crown. The Land Act 1948 created pastoral leases which run for 33 years and can be continually renewed. Rent is reviewed every 11 years, basing the rent on how much stock the land can carry for pastoral farming. The Crown Pastoral Land Act 1998 and its amendments contain provisions governing pastoral leases that apply to foreign and domestic lease holders. Holders of pastoral leases have exclusive possession of the land, and the right to graze the land, but require permission to carry out other activities on their lease. Lessees can gain freehold title over part of the land under a voluntary process known as tenure review. Under this process, areas of the lease can be restored to full Crown ownership, usually as conservation land managed by the Department of Conservation. In February 2019 the government announced an end to tenure review because it has resulted in more intensive farming and subdivision on the 353,000 hectares of land which has been freeholded, affecting the landscape and biodiversity of the land. With tenure review ending, the remaining Crown pastoral lease properties, currently 171 covering 1.2 million hectares of Crown pastoral land, will continue to be managed under the regulatory system for Crown pastoral lands. In April 2019 there had been 2,500 submissions for feedback to the government on the future management of the South Island high country. The types of land ownership in New Zealand are: Freehold title, Leasehold title, Unit title, Strata title, and cross-lease. The majority of land in New Zealand is freehold. LINZ holds property title records that show a property’s proprietors, legal description and the rights and restrictions registered against the property title, such as a mortgage, easement or covenant. A title plan is the plan deposited by LINZ when the title was created. Property titles do not contain information about the value of the property. No land tax is payable, but the local government authorities are empowered to levy taxes, termed as “rates,” on all properties within their territorial boundaries. Rates are assessed on either assessed annual rental value, land value or capital value. There is no stamp duty in New Zealand. In general, New Zealand requires GST be returned on all land sales and claimed on all land purchases unless the property is used solely for making “exempt supplies” (such as residential accommodation), or the GST is charged at 0 percent or “zero-rated.” When land is transferred between GST-registered parties, the transaction must be zero-rated for GST, provided that the purchaser intends to use the land to make taxable supplies and the land is not intended to be used as a principal place of residence by the purchaser. Where the transaction is zero-rated, no GST would be added to the sale price, no GST should be returned by the vendor, and no GST should be claimed by the purchaser. The purchaser may be required to account for GST if the property will be partly used for making exempt supplies. When commercial property is sold, GST may need to be added to the purchase price. A purchaser who pays the tax may be entitled to a refund. A mortgagee sale is subject to GST if the mortgagor would be liable to pay GST on the sale. While there is no comprehensive capital gains tax in New Zealand, profits made on the sale of any asset (including land) is assessable as income, where the IRD determines the asset is purchased as part of a dealing or investment business, or for the purpose of resale, or where there was an undertaking or scheme entered into for the purpose of making a profit. Profits from the sale of land are taxable, where construction, development or subdivision is involved, and if a consent or zoning change has or will benefit the land, and if the land is sold within ten years. For residential land the requirement is five years. Mortgages and liens are available in New Zealand. There is no permanent government policy as such that discriminates lending to foreigners. However the Reserve Bank of New Zealand (RBNZ) introduced a macro-prudential tool as a means to curb rising house prices. In October 2013, the RBNZ introduced a series of temporary loan-to-valuation ratio restrictions on banks’ lending to (domestic and foreign) investors and owner-occupiers wanting to purchase residential housing. During 2018, the RBNZ started a process of easing these restrictions due to the new Government’s housing market policies. From January 1, 2019, banks are limited to lending residential investors who have less than a 30 percent deposit, to be no more than 5 percent of their total new lending in that category; and no more than 20 percent of banks’ new lending to owner-occupiers who have a deposit of less than 20 percent. A registered memorandum of mortgage is the usual form used to create a lien on real estate to secure an indebtedness. There is no mortgage recording or mortgage tax in New Zealand. However from October 22, 2018 all non-resident purchasers must complete a Residential Land Statement declaring they are eligible to buy residential property in New Zealand, before signing any sale and purchase agreement: https://www.linz.govt.nz/overseas-investment/information-for-buying-or-building-one-home-live#statement. Failure to do so could incur significant penalties under the Overseas Investment Act. When a lien secured by real property is foreclosed, there is a statutory process that must be followed which overrides the mortgage form itself as well as legal costs relating to foreclosing a lien on real property. There are no restrictions on foreign lenders securing their advances over real estate in New Zealand. Nevertheless, on any mortgagee sale, lenders need to comply with the requirements concerning foreign ownership of land if the buyer or the land falls within certain criteria. There are some statutory controls imposed on the amount of interest which may be charged on a loan secured by real property (and private and government agencies that monitor and report on interest charges) that ensure that interest rates and costs are not excessive or illegal. There are no laws that that restrict the ability to make a borrower or guarantor personally liable for indebtedness secured by real property. Property legally purchased but unoccupied can generally not revert to other owners. The Land Transfer Act 2017 repealed the Land Transfer Amendment Act 1963 which previously outlined the process for cases of “adverse possession” or “squatters’ rights.” Section 155 of the Land Transfer Act 2017 allows a person to apply to the Registrar-General of Land for a record of title in that person’s name as owner of the freehold estate in land if: a record of title has already been created for the estate; the person has been in adverse possession of the land for a continuous period of at least 20 years and continues in adverse possession of the land; and the possession would have entitled the person to apply for a title to the freehold estate in the land if the land were not subject to the Act. The section applies to diverse instances, such as the case where an entire section is being occupied by someone unconnected to the registered owner, or in the case of a “boundary adjustment” between two properties. Section 159 of the Act lists instances when applications may not be made, such as land owned by the Crown, Māori land, or land occupied by the applicant – where the applicant owns an adjoining property – because of a mistaken marking of a boundary. Intellectual Property Rights New Zealand has a generally strong record on intellectual property rights (IPR) protection and is an active participant in international efforts to strengthen IPR enforcement globally. It is a party to nine World Intellectual Property Organization (WIPO) treaties and participates in the Trade Related Aspects of Intellectual Property Rights (TRIPS) Council. In March 2019, New Zealand entered into force the WIPO Copyright Treaty, the WIPO Performances and Phonograms Treaty, the Budapest Treaty and the Berne Convention. It implemented the Madrid Treaty in December 2012, allowing New Zealand companies to file international trademarks through the Intellectual Property Office of New Zealand (IPONZ). Since 2013, an online portal hosted on the IPONZ and IP Australia websites has allowed applicants to apply for patent protection simultaneously in Australia and New Zealand with a single examiner assessing both applications according to the respective countries’ laws. New Zealand is a party to the multilateral ACTA, which is aimed at establishing a comprehensive international framework that will assist parties to the agreement in their efforts to effectively combat the infringement of intellectual property rights, in particular the proliferation of counterfeiting and piracy. Changes to copyright regulations bestow copyright protection in New Zealand for nationals of countries which have recently joined the WTO, the Berne Convention for the Protection of Literary and Artistic Works, and the Universal Copyright Treaty from January 2017. The change is reciprocal protecting New Zealand copyright owners in those countries. There are about ten statutes that provide civil and criminal enforcement procedures for IPR owners in New Zealand. The Copyright Act 1994 and the Trade Marks Act 2002 impose civil liability for activities that constitute copyright and trademark infringement. Both Acts also contain criminal offences for the infringement of copyright works in the course of business and the counterfeiting of registered trademarks for trade purposes. The Fair Trading Act 1986 imposes criminal liability for the forging of a trademark, falsely using a trademark or sign in a way that is likely to mislead or deceive, and trading in products bearing misleading and deceptive trade descriptions. The government is reviewing the Copyright Act 1994 in light of significant technological changes since the last review in 2004. . New Zealand had agreed to tougher IPR and copyright protections under the TPP agreement, but the CPTPP suspended some of the original TPP copyright obligations, such as increasing rights protection from 50 years to 70 years. In November 2018, MBIE, which administers the Act, released a 135-page Issues Paper which summarizes the operation of the New Zealand copyright regime, its shortcomings, and the wide range of issues that need to be addressed. New Zealand has amended some legislation to comply with obligations under CPTPP. Customs New Zealand has had its powers to act on its own initiative to temporarily detain imported or exported goods that it suspects infringe copyright or trademarks. Previous policy to cover the infringing label or sticker, or simply removing the infringing part such as a logo will no longer be sufficient. Customs New Zealand now has authority to inspect and detain any goods in its control suspected of being pirated. The New Zealand High Court has been empowered to award additional damages for trade mark infringement, and unless exceptional circumstances exist, the courts must order the destruction of counterfeit goods. This will be in addition to the existing availability of compensatory damages under the Trade Marks Act 2002. New Zealand will retain its existing copyright term for creative works – and minimum required under the Berne Convention – of the life of the author plus 50 years after their death for films, sound recordings, books, screenplays, music, lyrics and artistic works. New Zealand will not be required to provide stronger protection for technological protection measures (TPMs) which act as “digital locks” to protect copyright work, nor provide stronger protection for rights management information; nor alter its internet service provider liability provisions for copyright infringement. The Copyright Tribunal hears disputes about copyright licensing agreements under the Act and applications about illegal uploading and downloading of copyrighted work. The Copyright (Infringing File Sharing) Amendment Act 2011 put in place a three notice regime, issuing alleged infringers up to three warnings within a nine month period, before ruling that infringement has occurred. The legislation enables copyright owners to seek the suspension of the internet account for up to six months through the District Court. The CPTPP will require New Zealand to provide a 12-month grace period for patent applicants. Under this requirement, inventors will not be deprived of their ability to be granted a patent in New Zealand if an inventor makes their invention public, provided the inventor files the patent application within 12 months of disclosure. This is important for many New Zealand businesses who will now not lose the right to patent their invention through accidental disclosure. In addition, pharmaceutical patent holders (who have provided their details to Medsafe) will have to be informed of someone seeking to use their drug’s clinical trial data before marketing approval is granted. The Smoke-free Environments (Tobacco Standardized Packaging) Amendment Act passed in September 2016, and from June 2018, all tobacco packets will be the same standard dark brown/green background color as Australia. New pictures and health warnings will be enlarged to cover at least 75 percent of the front of tobacco packs, and all tobacco company marketing imagery will be removed. The Smoke-free Environments Regulations 2017 standardize the appearance of tobacco manufacturers’ brand names. In November 2018, the Government announced plans to regulate vaping and smokeless tobacco products in New Zealand. An amendment to the Smoke-free Environments Act 1990 is expected to be passed this year limit the areas people can use such products, and change the way they are displayed in retail stores, similar to other tobacco products. The government has indicated a public consultation process will occur before an amendment is passed. New Zealand meets the minimum requirements of the TRIPS Agreement, providing patent protection for 20 years from the date of filing. The Patents Act 2013 brought New Zealand patent law into substantial conformity with Australian law. Consistent with Australian patent law, an ‘absolute novelty’ standard is introduced as well as a requirement that all applications be examined for “obviousness” and utility. The Patents Act stops short of precluding from patentability all computer software and has a provision for patenting “embedded software.” New Zealand currently provides data exclusivity of five years from the date of marketing approval for a new pharmaceutical under Section 23B of the Medicines Act 1981. Data protection on pharmaceuticals applies from the date of marketing approval, regardless of whether it is granted before or after the expiration of the 20-year patent. Under section 74 of the Agricultural Compounds and Veterinary Medicines Act 1997 data protection for non-innovative agricultural and veterinary products (products including reformulations and new uses), and from November 2016 data protection is available for ten years for innovative trade name products. From July 2017 New Zealand wine and spirit makers can register the geographical origins of their products under the Geographical Indications (Wine and Spirits) Registration Act 2006 . The Act and its amendments are administered by IPONZ and aims to protect wine and spirit markers’ products, to allow the registration of New Zealand geographical indications overseas, and to enforce action for falsely claiming a product comes from a certain region. . The most commonly intercepted item by Customs New Zealand is fake toys, according to an Official Information Act request . Electronics were the second most commonly intercepted item, followed by clothing and accessories. Most items originate from China, the United Kingdom, Vietnam, and Hong Kong. New Zealand is not on the USTR’s Special 301 report list. For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/details.jsp?country_code=NZ Edit Your Custom Report