MPs have passed a law designed to put an end to large anonymous donations in council elections.
The Local Electoral Amendment Bill was prompted by the police investigation into donations to the 2010 Auckland mayoral campaign by John Banks, that were declared anonymous.
The change means anonymous donations will now be capped at $1500.
It puts more onus on candidates and those involved in a campaign to declare if they know the source of an anonymous donation.
A person who hides the identity of a donor can be convicted and fined up to five thousand dollars.
Local Government Minister Chris Tremain said the new rules will be in place for this year's elections.