Property

Money laundering risk flagged

New legislation may make criminals more likely to launder money through property transactions, real estate agents have been warned.

Thursday, February 13th 2014

In its latest newsletter, the Real Estate Agents Authority said that property had previously been considered a complicated way to launder money.

But the new anti-money laundering legislation had meant that the easier methods had been restricted a lot, and criminals might turn to real estate instead.

“Although international obligations require real estate agents and lawyers to comply with the same rules, in New Zealand these businesses remain temporarily exempt from the extensive new regulations. Ironically, this means that real estate agents and lawyers may not always know what to look for, at the very time that criminals' interest in misusing their services as a 'washing machine' has increased.”

But anyone who is found to have helped a criminal launder money, even inadvertently could be fined up to $20,000. Companies can be fined $100,000. There is also the threat of two years' jail.

“It doesn't matter that agents are temporarily exempt from the more extensive rules that now apply to banks, the touchstone for ‘reasonable grounds’ is agents' current legal obligations. In the circumstances prescribed by the legislation, real estate agents are required by law to identify and report suspicious transactions. Not knowing that the obligations exist, or what they are, and not knowing what to look for, or not looking, is no defence,” agents have been told.

The Authority offered tips such as watching out for people using disproportionate amounts of cash, not viewing the property and offering prices that don’t reflect the market.

It said real estate would appeal to people wanting to launder money because it was capable of creating additional “clean” profits, such as rental income and capital gains.

Comments

No comments yet

Heartland Bank - Online 6.69
SBS FirstHome Combo 6.74
Wairarapa Building Society 6.95
Unity 6.99
Co-operative Bank - First Home Special 7.04
ICBC 7.05
China Construction Bank 7.09
BNZ - Classic 7.24
ASB Bank 7.24
ANZ Special 7.24
TSB Special 7.24
Unity First Home Buyer special 6.45
Heartland Bank - Online 6.45
China Construction Bank 6.75
TSB Special 6.75
ICBC 6.75
ANZ Special 6.79
ASB Bank 6.79
AIA - Go Home Loans 6.79
Kiwibank Special 6.79
BNZ - Classic 6.79
Unity 6.79
Westpac Special 6.39
China Construction Bank 6.40
ICBC 6.49
SBS Bank Special 6.55
Kiwibank Special 6.55
BNZ - Classic 6.55
Co-operative Bank - Owner Occ 6.55
ASB Bank 6.55
AIA - Go Home Loans 6.55
TSB Special 6.59
Kainga Ora 6.99
SBS FirstHome Combo 6.19
AIA - Back My Build 6.19
ANZ Blueprint to Build 7.39
Credit Union Auckland 7.70
ICBC 7.85
Heartland Bank - Online 7.99
Pepper Money Essential 8.29
Co-operative Bank - Owner Occ 8.40
Co-operative Bank - Standard 8.40
First Credit Union Standard 8.50
Kiwibank 8.50

More Stories

Support for regulation

Monday, March 18th 2024

Support for regulation

REINZ has emphasised the need for property management regulation to Parliament’s Social Services and Community Committee.

A better investment market

Thursday, March 14th 2024

A better investment market

“Reinstatement of interest deductibility starting from the new tax year on 1 April brings property investors back in line with every other business in the country, where interest costs are a legitimate deductible expense," Tim Horsbrugh, New Zealand Property Investors Federation (NZPIF) executive committee member says.

[OPINION] Recessionary times

Thursday, March 14th 2024

[OPINION] Recessionary times

It is not the best out there for many businesses and property sector people. Sales are down across the board, our clients’ confidence is falling, and there is a lot of uncertainty.

Interest rate expectations: It’s not over yet

Thursday, March 07th 2024

Interest rate expectations: It’s not over yet

Most Kiwis think interest rate increases have peaked.