Transfer of Property Act at Papua New Guinea
In Papua New Guinea (PNG), the Transfer of Property Act is governed by the Land Registration Act (LRA) 1981, which regulates the transfer of property and the registration of land. PNG has a mixed legal system that combines customary law with common law principles, due to its colonial history under Australia. Property transactions in PNG are largely governed by statutory law, and land rights are highly influenced by both customary land ownership and leasehold land.
Key Legal Framework for Property Transfer in Papua New Guinea:
1. Legal System Overview
Papua New Guinea follows a common law system, which is based on the laws of Australia and the United Kingdom, alongside customary law that is applied in many rural areas.
The Land Registration Act 1981 is the key statute that governs land registration and property transfer in PNG. It provides a system for registering interests in land, including sales, leases, and mortgages.
Customary land is a significant part of property law in PNG. The government does not own customary land, but customary landowners may lease their land to the government or to private individuals or entities.
2. Property Ownership in Papua New Guinea
Customary land is land owned by communities or tribes according to their traditional customs and practices. This land cannot be sold outright but can be leased to others, such as for development purposes.
State land is land that is owned by the government and can be transferred or leased by the government.
Private property can include both freehold land (land held by individuals or corporations) and leasehold land (land leased from the government or private owners).
The Land Registration Act 1981 primarily deals with the registration of freehold and leasehold lands, while customary land transactions are typically governed by the relevant provincial land offices or customary law.
3. The Process of Property Transfer
The process of transferring property in PNG involves the following key steps:
Agreement to Sell:
The buyer and seller negotiate the terms and conditions of the sale. This includes agreeing on the sale price, the property details, and any specific conditions attached to the sale.
A formal sale agreement is drafted, which sets out the terms of the transaction.
Due Diligence and Title Search:
Before the transfer can proceed, it is important to conduct a title search to ensure that the seller has clear and marketable title to the property.
This step ensures there are no existing encumbrances, disputes, or claims on the property. The title search is conducted through the Department of Lands and Physical Planning or a licensed conveyancer.
Payment of Taxes and Fees:
The buyer is typically responsible for paying stamp duty (a property transfer tax), which is calculated as a percentage of the property value.
Conveyancing fees and notary fees may also apply. These fees are generally paid by the buyer.
Registration of the Transfer:
For freehold and leasehold land, the sale must be registered with the Department of Lands and Physical Planning.
The buyer submits the signed sale agreement, payment receipts, and other required documents to the Land Registry for official registration.
Issuance of Title:
Once registered, the buyer receives the title deed for the property, which officially confirms their ownership of the land.
The property is now legally recognized in the name of the new owner.
4. Foreign Ownership of Property
Foreign nationals can purchase property in Papua New Guinea, but there are certain restrictions.
Foreigners cannot own customary land, but they can lease it. They can, however, own freehold land or leasehold land with approval from the government.
Foreigners wishing to purchase land must comply with investment laws and may require approval from the Investment Promotion Authority and the Department of Lands and Physical Planning.
5. Taxes and Fees
Stamp Duty (Property Transfer Tax): This is typically paid by the buyer and is calculated as a percentage of the sale price or market value of the property. The rate may vary depending on the property value.
Conveyancing Fees: These are legal fees for processing the transaction, which may include solicitor or conveyancer costs.
Registration Fees: Fees are paid to register the property transfer with the Land Registry.
6. Inheritance and Succession of Property
Inheritance of property in Papua New Guinea is governed by both customary law and statutory law. For customary land, the succession follows traditional practices, and land is passed down within the clan or community according to established customs.
For freehold and leasehold land, inheritance is subject to PNG’s laws of intestate succession or the deceased’s will.
Probate proceedings are required to transfer ownership of freehold or leasehold property after an individual’s death.
7. Dispute Resolution
Property disputes in Papua New Guinea are often resolved through the Land and Titles Commission, which handles disputes regarding land ownership, land use, and property transactions.
Mediation and arbitration are also available methods for resolving conflicts, particularly in areas involving customary land.
Key Documents for Property Transfer:
Sale Agreement (Contrato de Venda): A formal document that outlines the terms and conditions of the property transfer.
Title Deed: The official document confirming the buyer’s ownership of the property after registration.
Proof of Payment of Taxes and Fees: Documentation proving the payment of stamp duty, conveyancing fees, and other taxes.
Land Registry Certificate: The official confirmation from the Department of Lands and Physical Planning that the transfer has been recorded in the registry.
Conclusion
In Papua New Guinea, property transfers are governed by the Land Registration Act 1981, with the process involving negotiation, agreement, payment of taxes, registration, and issuance of title deeds. While customary land cannot be sold outright, freehold and leasehold properties can be transferred through a formal process that includes registration with the Land Registry. Foreigners can purchase property in PNG but must adhere to certain restrictions and approval processes.
RELATED Blog
0 comments