Introduction
1. Earlier this month the Fiji Parliament enacted the Land Sales (Budget Amendment) Act 2016 (“Amendment Act”). The Amendment Act is aimed at non-resident owners of Fiji land caught by the 2014 law changes. They will now be able to apply for additional time beyond the existing December 2016 deadline to complete building on their land. A “Review Committee” is now to be set up to consider individual applications. The Amendment Act has also added new offences and penalties for non-compliance.
The 2014 law changes
2. The 2014 law changes amended a number of rules relating to non-resident ownership of land in Fiji. One of these was that non-residents who owned vacant freehold or State Lease land for residential purposes were required to complete construction of a residential dwelling on their land by 31 December 2016. This dwelling was required to have a minimum value of F$250,000. Non-resident owners who did not comply would face monetary penalties of 10% of the purchase price of their land for every six months that they were non-compliant.
3. Many non-residents, and their representatives, have complained to the Government of the unfairness of the new law and the impossibility of complying with it. Even before Tropical Cyclone Winston, suitable building materials and builders were difficult to source, and regulatory applications for building approvals could take many months to process.
What the Amendment Act does
4. The Amendment Act appears to have been passed in response to the requests for relaxation of the construction requirement. It now sets up a “Review Committee” to which affected owners of land may apply for an extension of the period to complete construction. The Review Committee will then make a recommendation to the Minister[1] to approve or refuse an application. No appeals will lie against Review Committee recommendations or Ministerial decisions.
5. The details of the process, including the membership of the Review Committee, are to be set out in regulations. These regulations have not been published and no indication has been given on when they will be.
Offences and penalties
6. The Amendment Act also allows the Minister to make regulations:
(a) to enforce the provisions in the Act, which include property inspections and
(b) to prescribe offences and penalties:
(i) for an individual, penalties not exceeding $50,000 or two years imprisonment or both or
(ii) for a company, penalties not exceeding $100,000 or five years imprisonment or both.
It has not been made clear what these powers or penalties are required for.
Conclusion
7. The 2014 law changes have created significant uncertainty about the Government’s attitude to non-resident investment in Fiji. The Amendment Act seems to recognise that it is impossible for many non-residents to comply. However, the solution proposed imposes yet another bureaucratic hurdle for those seeking extensions to the deadline. No guidance has been provided on the factors to be considered by the Review Committee in making its recommendation or what flexibility it will allow.
8. The Amendment Act also allows the Minister to prescribe offences with the penalty regime being imprisonment and large monetary penalties. We will have to await further Government announcements on this issue.
9. Contact Richard Naidu, Glenis Yee or Janice Fong if you need any assistance on these matters.
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We understand that the Minister for Finance may be responsible for approving these extensions.
Disclaimer
The information and opinions in this Legal Alert are for general information purposes only. They are not intended as specific legal or other professional advice and should not be relied upon or treated as a substitute for specific advice. Munro Leys can accept no responsibility for any loss arising from reliance on the general information contained in this Legal Alert.