Guidance on required fields
Sale price (Purchase price)
Sale price is the gross sale price at the date of settlement, including chattels and other elements.
This should be the final settlement price after any adjustments made during the due diligence period, for example, an allowance for repairs that became evident from a building inspection report after the initial date of agreement as negotiated and settled between the parties.
Agreement date
The date on which the contract for sale and purchase was signed by both the vendor and purchaser.
Settlement date
The date on which the property was transferred to the new owner under the agreement.
GST provision
Whether or not the sale price is inclusive of GST.
Further options within the NoC form include zero-rated, 15%, or N/A, depending on the circumstances of each individual transaction.
Notification of elements in the sale price other than land and buildings, household and minor farm chattels (replaces agreed land and buildings apportionment)
This requires a Yes/No response. The intent is to flag to rating valuers that the sale price has components of significance that are not land and buildings or household and/or minor farm chattels.
Due to value definitions in the Rating Valuations Act 1998 allowances have to be made for elements of a sale price that are not land, buildings or improvements.
Household chattels would be those highlighted in the sale and purchase agreement such as curtains, carpets, dishwashers. Minor farm chattels would be items such as shearing machines, stock water pumps, electric fence units etc. Elements of a farm sale that would be considered more than minor would be significant plant and machinery such as centre pivot irrigators, milking plant and shares in farming co-operatives.
Nature of the transaction
The nature of the transaction provides valuers with information to determine whether a sale is market or not. Market sales are the prime evidence to support revaluations.
The options for nature of the transaction available through the NoC process and copied through to the Rating Valuations Rules 2008 are:
Nature of Transaction:
- Open market sale at arm's length
- Off-market sale at market valuation
- Non-market sale (family, friend, other)
- Mortgagee sale
- Boundary adjustment.
Guidance on Nature of Transaction
a. Open Market Sale (Arm’s Length)
A transaction exposed to the open market and completed between independent, willing parties acting without compulsion. The sale price is considered to reflect market value. A combined sale of 2 or more rating units (known as a multi sale) could be described as open market if the above criteria are met.
Leading indicators would include the use of a real estate agent and marketing of the property. Private sales can be open market, particularly if they are marketed.
b. Off-Market Sale at Market Valuation
A transaction completed without full open market exposure, but between independent parties. The sale price is considered to be consistent with market value based on available evidence, such as valuation reports.
Leading indicators would include a valuation report or other evidence such as a real estate agent's appraisal that supports the transaction being at or close to market value.
c. Non-Market Sale (Family, Friend, Other)
A transaction involving related or associated parties, or otherwise influenced by non-market factors, including sales related to Public Works Act, Council rates arrears sale, and any other forced sale that is not a mortgagee sale as recorded at (d) below. The sale price may not reflect market value due to non-arm’s length conditions.
Leading indicators would include the nature of the relationship (for example a trust formation, relationship property settlement, or where there is a Crown/Council purchaser or vendor).
Other types of non-market sales would include:
- gifting of property
- trust formations
- internal business arrangements such as restructuring into a different entity
- transactions that involve swaps of property
- receivership, insolvency or similar forced sale transactions
- partial Interests, such as a share title sale.
d. Mortgagee Sale
A transaction involving a mortgagee exercising their right of sale following default on the mortgage.
e. Boundary adjustment
A transaction involving the exchange of land between neighbours following survey. This may include a consideration, which if available must be reported.
Other types of sale transactions
Complex property transactions including those that involve multiple properties
Some property transactions are complex and involve other elements, for example business goodwill, forestry rights, shares and other types of property.
In these situations the Solicitor/Conveyancer note field in the NoC can be used to give rating valuers further information on the sale.
For transactions that involve multiple properties the NoC process should gather all the properties in one NoC with each property/rating unit identified. The sale price recorded should be the combined sale price for the properties. If the combined sale price has been broken down into individual sale price components across the portfolio, then this can be provided in the Solicitor/Conveyancer note field in the NoC.
The Solicitor/Conveyancer note field can also be used to provide further information on particular transactions, such as those involving immediate neighbours.
Māori land
The sale of Māori land, be that Māori Freehold Land or other types of Māori land, must be reported through the NoC process.
Transfers involving sectors of Government
Sales between or involving the Crown and Local Authorities must be reported through the NoC process. However, due to the circumstances of the relationship they will often be considered non-market sales.