Lawyers fear $20,000 fines for failing to give information on foreign investors' citizenship status and say they would be forced into an impossible position by the Government's planned foreign house-buyer ban.
A strongly-worded 23-page Auckland District Law Society submission has gone to the Finance and Expenditure Select Committee, objecting to putting the onus on lawyers and conveyancers for checking the citizenship status of trusts, companies and people if the new law is passed.
"How are lawyers and conveyancing practitioners going to satisfy themselves that their clients are compliant with this legislation?" asked the submission from society president Joanna Pidgeon, who also complained of a lack of consultation with lawyers before the bill was drafted.
"Will it be enough to sight a certificate of citizenship or permanent residence visa or a passport or will they need to verify this?" she asked.
The Treasury said it would be straightforward to check an individual's status but the status of companies and trusts might require substantial investigation to comply with the proposed Overseas Investment Amendment Act, Pidgeon said.