'One client purchased $100m worth of property with cash' - Kiwi estates used to house money laundering

Owning property is a Kiwi dream, but it is also a safe haven for dirty money.

It is estimated that billions of dollars are being channelled through property every year. Source: 1 NEWS

"The UN estimates there is two trillion dollars of money laundering each year so it would be naive to assume New Zealand isn't part of the problem," John Bolton of Squirrel Mortgages said.

It is estimated between $1.5 billion to $10 billion of dirty cash is laundered through New Zealand every year.

"Someone can buy a property with cash - they can go to a financial institution and borrow against that property and there is no requirement to understand where the money came from," Mr Bolton said.

PricewaterhouseCoopers partner Eric Lucas, who specialises in business and intellectual property valuations, said there are also other ways to launder money through the property market.

"You could easily go and buy a house at an inflated price and then use your laundered money to repay the debt over time.

The existing regime that applies to financial institutions means fines of up to $200,000 - Amy Adams, Justice Minister

"You can go and buy a cheap house and spend a lot of money on renovations with your launder money. You could even get a side deal with a seller."

Auckland’s booming market is a known target for foreign criminals and local gangs.

"A lot of it is coming from offshore but there will be domestic as well," Mr Bolton said.

"As an example last year we had a client purchase close to $100 million worth of property with cash."

In 2013 the New Zealand Government ordered casinos, banks, and mortgage brokers to confirm their customers' identities and report suspicious transactions.

Now the Government is targeting real estate agents, lawyers, and those who trade in high value objects.

"The existing regime that applies to financial institutions means fines of up to $200,000, but also there is a criminal element so the police can prosecute," Justice Minister Amy Adams said.

Officials are finalising proposals that the Ms Adams will take to Cabinet later this year.