New rules for property transactions   Leave a comment

The Government has acted to require buyers and sellers of property to have IRD numbers. see http://taxpolicy.ird.govt.nz/news/2015-06-23-property-tax-rules-bill-introduced

The Taxation (Land Information and Offshore Persons Information) Bill was introduced into Parliament yesterday.

There are two main proposals:

1. Parties to real estate sale and purchase agreements will have to have an IRD number and supply that number to Land Information New Zealand. If one of the parties is a non-resident they will also have to provide the Tax Identification Number from the country where they are resident.

2. A non-resident applying for an IRD number in New Zealand will have to provide details of a New Zealand bank account.

There are exceptions of course, such as for the family home.

These changes are designed to help IRD enforce the land taxing provisions. They come ahead of the other big Budget 2015 measure proposing a bright line test to tax property bought and sold within two years. We’ll see more on that later this year.

In the meantime, when these measures are enacted IRD will have more ammunition to go after property traders and developers, whether for income tax or GST.

Iain

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