SAM & NICK COWDY
Spring is back, with all its blossomy glory, which must mean it’s time to trot out that classic real estate line: Spring is the best time of year to sell your house. But that genuinely rings true this year, more so than any other recently.
Figures just released by REINZ show a dramatic drop in the availability of housing stock around the country, and it’s definitely affecting things in Canterbury, too.
It’s reassuring seeing these statistics, because they reinforce what we’re seeing throughout the Christchurch residential market.
We believe that the limited housing stock available for sale is the most significant thing impacting price expectations and the way the market behaves in general right now – and it will only get more interesting as things heat up in Spring.
Adding interest to the situation is the steady increase in value in residential properties, with a national median increase of 5.8% year on year.
In Canterbury, it’s been slightly lower at 2%, but we’re definitely seeing great figures on good quality housing stock sales in our office.
So, whilst we know that Spring is traditionally a good time to sell your property, THIS Spring is shaping up to be a great season for sellers.
The team here at Cowdy & Co. Property Management has been busy ensuring all our properties comply with the amendments to the Residential Tenancy Act, in regard to Smoke Alarm Testing, which came into law on 1 July.
We have been amazed at the number of Compliance Certificates which have come back noting that the existing alarms were well past their expiry date, and that many did not meet the required decibel reading.
These alarms have subsequently all been replaced with photoelectric alarms as part of the $99 fee our chosen contractors charge to manage the alarms in each property.
We have been extremely satisfied with the speed in which they have been able to carry out the work. It gives owners, tenants and us peace of mind, especially following an arson attack on one of our properties at 1.30am on 1 July. Although a rare and unexpected event, it’s clear smoke alarms save lives. Thankfully the family in the house sleeping were not injured.
It is so important to have correctly working smoke alarms, not only from a legal stand point but also for the inhabitants’ safety, and it is gratifying to know that here at Cowdy & Co. Property Management we provide for both these aspects.
Last year, we reported on the Council’s proposed reduction in the number of protected trees in Christchurch city. At the time, approximately 1900 trees were on the list, and the council was proposing a significant reduction to just 380 trees listed on the Schedule of Significant Trees.
Public submissions were, as expected, fairly robust, and several groups, including the Christchurch Civic Trust and the NZ Notable Trees Trust entered into mediation with the council and reached an agreement that would see around 1200 trees retain their protected status.
The council got itself into a little more hot water recently when it announced in early August that they’ll only extend the protected status of an additional 333 trees, making a total of just 737 on the list. Somewhat predictably, outrage ensued!
However, it appears that just a week or two after their announcement, the Council has reverted back to its mediated decision that would provide protection for 1200 trees. They are blaming this second U-turn on a paperwork error – they’d referenced the wrong spreadsheet, apparently.
The issue of protected trees is an interesting one for us here at Cowdy & Co. While we wholeheartedly love our Garden City, and appreciate that privately-owned trees of significance definitely contribute to the beauty of our city, it can be a challenge for homeowners wishing to extend or rebuild their earthquake damaged homes.
Great news! Another piece of Christchurch’s heritage will be brought back to life. This time, it’s the distinctive Thomas Edmonds Band Rotunda that was severely damaged in the quakes.
The rotunda will be rebuilt in its spectacular riverside location and will include its original dome roof, which was the only part of the building able to be saved. New retractable glazing will mean that it can be used all year round.
This will mean it can be used as a music performance space regardless of the weather.
Councillor Andrew Turner, CHED Committee Chair, was delighted to make the announcement. “The Thomas Edmonds Band Rotunda is a fantastic example of a striking and iconic piece of heritage that can also be actively used by the community,” he told The Press.
We’re excited that this grand old piece of history is going to spread lovely music throughout the city once it’s restored.
The project has a budget of $1.2 Million and construction is due to start in early 2018.
JOSH SMITH ZBUILT
New Zealand is renowned for many things: an epic national rugby team, a clean, green environment, and perfect slopes for winter sports. Now a building revolution dubbed the SuperHome Movement is aiming to make its mark.
Adequate housing has been defined as “protection from the cold, damp, heat, rain, wind, structural hazards, disease vectors, and other threats to health”. The World Health Organisation recommends a minimum indoor temperature of 18°C in winter, with a warmer minimum temperature for the elderly or very young, to protect against illnesses and poor health. Cold houses can cause an increase in allergenics such as mould and dust mites, and an increase in poor health, particularly respiratory illnesses.
So, what causes houses to be cold?
Poor building envelope design, minimal insulation and inefficient heating systems are the main culprits – even recently built houses can often lack any form of airtightness, or insulation to concrete slabs, and have poorly installed wall or ceiling insulation and inadequate ventilation. The poor design and building quality of these houses has a lot to answer for.
The SuperHome Movement
The SuperHome movement is aiming to construct 1000 homes in New Zealand that are green, high performing, and energy efficient. From start to finish these homes will ensure that the next generation of New Zealanders will live in a warm, well ventilated, well insulated environment. Every step of the design and construction process maximises energy efficiency in order to achieve a healthy, environmentally sound home. The design of these houses focuses on various elements including:
- Building wraps: using the correct building wrap for moisture control and airtightness will make sure your home is warmer and drier
- Mechanical Heat Recovery Ventilation Systems: removing the homes polluted moisture laden air to the outside while at the same time replacing it with fresh air from outside by passing it through the Heat Exchanger and returning up to 93% of the energy (heat) back into your home
- Adequate insulation: in the right places and installed correctly
- PV/solar panels: convert sunlight into useable electricity
- Smart Home Control: decrease energy use by scheduling key appliances, such as hot water cylinders or heated towel rails, to switch on or off at specified times
- Greywater recycling: protect NZ’s fresh, clean water supply by using slightly used water for a secondary usage, such as flushing toilets or irrigation
- Rainwater harvesting: use rainwater for garden irrigation or inside use in the bathroom or laundry
The SuperHome Movement is the revolution in the housing market that Kiwis have been crying out for; and perhaps this will be the movement that transforms our housing into something as world class as our rugby team.
WARWICK WATTS & AARON CASSIDY DUNS LIMITED
03 365 0768
As of 1 October 2015 the Inland Revenue introduced a new intention test providing a clear rule that is objective and easy to enforce.
The Bright-line test is the second of the three stage Government reform package to tighten the property investment rules announced in the 2015 Budget. Recently the Inland Revenue has also rolled out a withholding tax for offshore persons selling New Zealand Residential Property.
Key Features of the Bright-line test you need to be aware of;
- The gains from the disposal of residential land acquired after 1 October 2015 and disposed of within two years will be taxable, subject to some exceptions.
- The start date is generally at the point the title of the property is transferred to the purchaser and ends at the time the vendor enters into a contract to sell the property.
- For sale “off the plan” the start date is from the date the purchaser enters into a contract to purchase.
- The bright-line test applies only to residential land of which includes:
– Land that has a dwelling on it
– Land where the owner has an arrangement to build a dwelling on it
– Bare land that can have a dwelling erected on it.
- The bright-line test does not apply to:
– Business premises
– A person’s main home
– Property acquired through inheritance
– Property acquired through a relationship property settlement (certain circumstances apply).
- A person can only have one main home; if a person has more than one main home, the main home is considered the one which the person has the greatest connection to.
- A person will be considered a ‘habitual seller’ if they have disposed of the main home twice in the previous two years. This will negate the main home exemption.
The Bright-line test rules are reasonably complex and cater for many different situations. It is therefore important that they are on a case by case basis with reference to your individual circumstances. If you are in doubt if the new rules apply to your situation, we would recommend you seek professional guidance.
When selling a property there is now more paperwork to complete.
When buying, selling or transferring New Zealand property, excluding your main home, you’ll need to provide to your lawyer the IRD number and your foreign taxpayer identification number (TIN), if you have one, for the individual or entity selling the property. Such information will be declared in a Land Transfer tax statement that is completed by your lawyer.
Considerations also need to be given to GST (Schedule 2) on the sale and purchase agreement to determine if the transaction needs to account for GST.
If you sell your property within two years of acquisition you will be required to complete an IR833 “Property Sale information” form for the IRD to declare the profit/loss from the transaction and secondly an IR1101 to declare whether you are considered an ‘offshore residential land withholding tax person (RWLT)’.
Please be mindful New Zealand citizens that have not lived in New Zealand for the last three years are caught by these new rules. If you are considered an RWLT person, withholding tax will be deducted from the sale proceeds and provided to the Inland Revenue.
As it is a serious offence to provide false, incomplete or misleading information we recommend vendors are familiar with the concepts and terms used in the rules to ensure their declaration is completed correctly, or to seek professional advice if required.
Disclaimer: This article is intended to provide general information only. It should not be relied upon without first obtaining tax advice on your particular circumstances. If you require further information or advice please contact Warwick Watts (Managing Director) or Aaron Cassidy (Associate) of Duns Limited on 03 365 0768.
Consultation has just closed on another round of proposed changes to the Building Code – affecting 32 compliance documents, to be precise.
Nick Smith, Minister for Building and Housing recently announced the move by explaining that the construction sector is booming at such a rate, the Government owes it to NZ to ensure that high standards are maintained throughout the boom.
The proposed changes will see the Government add two new Acceptable Solutions for waterproofing, as well as amending a number of existing Acceptable Solutions and Variation Methods to things such as slip resistance for walking surfaces, glass barriers, safety glass and foil insulation.
In additon to these changes, the government wants to make compliance with the Building Code easier and more efficient, so they’ve announced a new website that will be a single point of reference for people working in the industry. The new website will be ready early in 2017.
We’ll follow this with interest and keep you updated as more information comes to light.
With the recent amendments to the Residential Tenancy Act that came into effect on July 1st 2016 with regard to insulation in rental properties, we thought this was a good opportunity to take a look at what is actually required. Private landlords will have until 1 July 2019 to ensure their properties meet the insulation requirements.
So what are the specifics?
• Ceiling insulation must have a minimum thickness of 70mm, it must cover all accessible areas above habitable spaces – except where clearances are required around downlights or flues.
• Underfloor insulation is required below all suspended timber subfloors, covering all the accessible subfloor area beneath habitable spaces.
• Habitable space means an interior space of a building that is a space for activities normally associated with domestic living; this includes bedrooms, kitchens, living space, bathrooms, toilet, and laundry, but excludes garages and storage space, except where garages are used as living or sleeping areas.
• Concrete slabs are counted as underfloor insulation.
Most homes built after 1978 should have had insulation installed which met thermal requirements at the time of construction and are likely to still comply with the regulations, provided the insulation is in a reasonable condition and meets the minimum thickness.
Insulation is measured by R-value, this indicates the insulation’s thermal resistance. To ensure your insulation meets the requirements it must meet the R-values shown in this table.
Insulation products which are allowed are: Loose-fill product (eg. wool style products), segment and blanket products (eg. wool style products, polyester), rigid sheet products (eg. expanded or extruded polystyrene), semi-rigid insulation, pipe insulation (eg. pre-formed tubular foam), and hot water cylinder wrap (wool style product with cloth or foil backing).
Insulation products not allowed are: Any in situ foam product, any product with a reflective insulation layer, and sub-floor reflective insulation (eg. foil).
All new tenancy agreements from 1 July 2016 will have to include a statement from the landlord about the extent of insulation in the ceiling, underfloor and walls of their property. This will help tenants make informed choices when choosing where to live.
Tenancy Services has announced the launch of a Tenancy Compliance and Investigations Team. This comes as part of a raft of changes brought about under the new Residential Tenancies act and demonstrates that the government is exercising its increased powers to prosecute landlords whose property isn’t up to the minimum standards required.
The purpose of the new unit is to monitor and enforce compliance under the Act. The team has at their disposal a number of options that allow them to ensure landlords comply with the legislation.
They can also act on behalf of a tenant in Tenancy Tribunal and District Court actions – the reasoning behind this is that all residential landlords are effectively operating as a business, and all businesses are required to be compliant with any legislation that affects their offering.
If you have any questions regarding residential tenancies, we’re here to help. Call Janice Cowdy in our property management team today on 03 355 6686.