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PROBLEM
Many clients underestimate the process involved in transferring a property from personal names into a company.
It’s not just a title update (unfortunately).
It’s a full legal transaction and refinance that requires coordination between the lawyer, lender, and accountant.
RISK
Delays or mistakes in the transfer process can cause:
- Settlement dates to shift
- Loan documents to be issued incorrectly
- Tax obligations (e.g. Brightline) to be overlooked
WHAT THE LAWYER NEEDS
Before your lawyer can prepare documents, they will need:
- Full property address
- Current iVal or a valuation agreed with the bank
- Proof of address for the company (e.g. utility bill)
- Company ID and extract from Companies Office
- IRD number for the company
- Names of all directors
- Preferred settlement date (minimum 2 weeks from loan documents issuing)
- Confirmation of updated insurance Certificate of Currency (COC), naming the company as owner and new bank as mortgagee
ACCOUNTING CONSIDERATIONS
Clients must speak with their accountant before proceeding to:
- Confirm any Brightline implications
- Understand if there are GST considerations
- Ensure proper tax treatment of the transfer
LEGAL PROCESS
- Internal Sale Agreement
Your lawyer will draft a sale and purchase agreement showing a sale from the individual(s) to the company.
This is required for the lender and title transfer at LINZ.
- Bank Sign-Off
This internal agreement must be approved by the bank.
Loan structure, borrowing entity, and insurance must match the agreement.
- Settlement Statement
The seller’s lawyer prepares a settlement statement showing:
- a. Full purchase price (between personal name and company)
- A credit reflecting internal refinance (the company isn’t paying the full price)
- Final amount to pay is usually equivalent to the loan discharge amount
- Settlement
- Bank advances funds under the new loan (in the company’s name)
- Title is transferred
- Mortgage registered in the company’s name
- Tenancy (if applicable)
If tenants are in place:
- Notify them of the ownership change
- Update tenancy agreements as needed
- Consider rent apportionment across ownership change date
- Change bank account for rent payments to the company
LEGAL COSTS
Legal costs will vary depending on the law firm.
Expect costs to be more than a standard refinance but less than a standard sale.
As a ballpark, allow around $2,500 incl. GST, plus disbursements of approximately $600 (LINZ charges and purchasing an ADLS agreement).
TL; DR
- The most important thing clients can give themselves is time.
- The transfer from personal to company name is a full legal and financial transaction.
- Lawyers need specific information and at least 2 weeks from loan doc issue.
- Accountants should advise on Brightline and tax implications.
- An internal sale agreement and new settlement process are required.
- Legal costs start at approx. $2,500 incl. GST plus disbursements.
- One lawyer can do the entire transactions (act for both sides) so long as the sellers are the same as the company's directors and they sign waivers of independent legal advice.
Bonus Checklist
✅ WHO DOES WHAT: DIY VS LEGAL TASKS
What the seller/directors can do:
- Set up the company on the Companies Office
- Obtain proof of address for the company (e.g. utility bill)
- Apply for an IRD number for the company
- Update the property insurance to list the company as owner and new bank as mortgagee
What your lawyer will do:
- Draft the internal sale and purchase agreement
- Prepare all compliance documents for the transfer
- Arrange discharge of the current mortgage and coordinate signing of new loan documents
- Draft company resolutions to approve the transaction
- Complete the electronic dealing in LINZ to register the transfer and mortgage
