New Zealand’s real estate industry has pushed back against a proposed anti-money laundering (AML) levy, telling MPs it would unfairly add to the millions already spent on compliance.
Compliance Costs Already Weighing on Real Estate Agencies
Barfoot & Thompson managing director Peter Thompson told the Economic, Development, Science and Innovation select committee the firm spends about $2 million annually meeting AML obligations.
“The cost of compliance already weighs heavily on our industry,” he said, describing the levy as an “unfair assessment.”
Thompson warned that agencies could not carry the costs alone. “Companies will often absorb a large part of the cost, but it will be passed back to the consumer – and I don’t think that’s in the best interests of New Zealanders.”
He also highlighted inefficiencies in the system, with lawyers, banks, and agents all duplicating checks. Thompson urged MPs to consider a single central database. “Having three different groups doing AML – all those costs have been passed back to the consumer,” he said.
Real Estate Institute Warns of Disproportionate Burden
The Real Estate Institute of New Zealand (REINZ), which represents 95% of the sector, echoed the call for relief.
Chief executive Lizzy Ryley said members had previously estimated compliance costs at $30m, but that figure was now “far greater.”
“The risk profile of our sector is materially lower than high-risk sectors such as banking and finance. A risk-based system should focus resources and levy costs on higher-risk industries,” she said.
General counsel Melisa Beight added that small agencies “operate on really tight margins, and they just can’t absorb another cost.”
Government Defends Proportionate Levy and Global Standards
Associate Justice Minister Nicole McKee said the reforms were intended to simplify compliance and ensure New Zealand meets global standards.
She acknowledged the system was “complex, obstructive, and places repetitive, burdensome obligations,” but said the levy would be “proportionate,” with higher costs on larger, riskier sectors.