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Introduction

This work category provides for property acquisition for local roading purposes, prior to the Transport Agency approving funding for the construction/implementation of a project.

Principles and conditions, where relevant, may be applied to other activity classes

The principles and conditions of advance property purchase for local roads set out below may be applied to other activities classes, e.g. public transport improvements (work category 531), walking and cycling improvements (work categories 451 and 452), where the Transport Agency has agreed that it will assist the funding for property purchased for land transport purposes prior to it approving funding for the construction/implementation of a project.

Specific conditions below will be waived by the Transport Agency where it decides these are not relevant to other activity classes. The Transport Agency may require additional conditions to apply to specific cases involving other activity classes.

Advance property purchase for other activity classes will be funded under the same work category that will be applied to construction/ implementation of the project, e.g. work category 531 for public transport infrastructure projects.

Qualifying activities

Examples of qualifying activities include, but may not be limited to:

  • valuation
  • legalisation surveys
  • acquisitions
  • compensation.

Other potential activities not shown above should be discussed with the Transport Agency for eligibility.

Funding is subject to the conditions set out below.

Exclusions

Exclusions include:

  • property purchase costs of less than $500,000 – these are to be included in the project costs conducted under the appropriate work category, and
  • where an exchange of land occurs between a private landowner and an Approved Organisation, or where land is vested in an Approved Organisation by a private owner required to do so without monetary payment for the land, the transaction does not qualify for funding assistance. However, where these involve payment of land transfer fees or stamp duty, these costs can be included as acquisition costs.

Conditions

Conditions for funding assistance include:

  • funding assistance will be based on the greater of the purchase price or current market value
  • the basis for establishing current market value will by agreed with the Transport Agency prior to the funding application. The default methodology will be an independent valuation. However,  Transport Agency property acquisition staff may advise an alternative methodology is appropriate, based on the scale of the application and movements in the property market since the property was purchased or last valued
  • the land must be designated in the district plan for road purposes or its land transport purpose described sufficiently in other local authority planning documents to the satisfaction of the Transport Agency's legal representative
  • the preferred option for the programme, package or project must be endorsed by the Transport Agency and should be a major element in the improvement of the road system
  • the Transport Agency’s financial interest will be registered on the property title by way of a caveat registered by the Transport Agency. If any property deemed surplus to transport needs is sold or transferred, the Transport Agency will withdraw any registered caveat on settlement provided its share is to be reimbursed to the Transport Agency within five working days from the settlement date of the sale or transfer. The Transport Agency’s share will be in the same proportion as its contribution was to the total purchase price or market value of the property when assisted with funding from the National Land Transport Fund (NLTF).
  • additionally, the Transport Agency will, at the end of each financial year receive its share of all net income received from the property (e.g. any rental income) between the date funding was advanced from the NLTF in respect of the property and:
    • for land needed for transport purposes, the start of construction; and
    • for land not required for transport purposes, its sale or transfer.
  • the Transport Agency is to be given the opportunity to express a view on the proposed disposal of or alteration to the property
  • the purchase is required for hardship reasons or for other situations as specifically approved by the Transport Agency 
  • legalisation surveys, including plan fees payable to Land Information New Zealand, are to be treated as part of the land acquisition cost. no other expenses involved in the legalisation process are eligible for funding assistance
  • any payment for Betterment recovered in terms of section 326 of the local government act 1974 shall be a credit to the cost of the project – see betterment.
  • all costs must be identified by project and available for audit
  • a land plan must be available for audit purposes and must indicate the area of land to be purchased and the part that is to be converted to road reserve, with each individual property to be identified on the plan, and
  • while the land is held by the Approved Organisation, prior to its use in a transport activity and/or disposal, a property report must be submitted on Transport Investment Online (TIO) each year.

Funding assistance rate (FAR)

The usual funding assistance rate is:

Applying for funding approval

Applications for funding approval of advance property purchase should be made through the 'Improvement activity' module in Transport Investment Online (external link)(TIO).  The application will be made as the Property phase of a local road improvement project.

Claiming

Claims for advance property purchase may be made once funding approval is confirmed for the activity in Transport Investment Online(external link) (TIO), subject conditions precedent, if any. 

Registration of caveat by Transport Agency legal team

The Transport Agency legal team will assist Transport Agency staff in registering caveats as required under the conditions of funding.

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