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Inland Revenue

Tax Policy

PUBLISHED 10 September 2015

Property tax bills receive third reading

Draft legislation that was introduced into parliament as the Taxation (Land Information and Offshore Persons) Bill on 22 June 2015 has been divided into two bills: the Land Transfer Amendment Bill and the Tax Administration Amendment Bill.

These have now had their third reading.

- The draft legislation provides that buyers and sellers of property will have to provide their IRD numbers at the time of property transfer, and persons who are tax-resident in another country will also have to provide their foreign equivalent of an IRD number. There will be an exemption for the main home;

- in order to obtain an IRD number from Inland Revenue, offshore persons will need to provide evidence of an operating New Zealand bank account

For more information, see the Ministers’ media statement.

Hon Todd McClay
Minister of Revenue

Hon Louise Upston
Minister for Land Information

10 September 2015

Media statement

Property rules strengthened by Taxation Bill

Revenue Minister Todd McClay and Land Information Minister Louise Upston say people buying and selling property for profit will now be unable to avoid paying their fair share of tax.

Provisions introduced in the Taxation (Land Information and Offshore Persons Information) Bill passed the Third Reading in Parliament today.

The resulting measures amend the Land Transfer Act and Tax Administration Act 2015, and will see Land Information New Zealand (LINZ) collect additional information when property is bought and sold, and pass this information to Inland Revenue.

“Under this legislation, buyers and sellers will have to provide their IRD number and other details when transferring property – unless it is, or will be, their main home,” Mr McClay says.

“Those who are tax resident elsewhere must provide their IRD number from that country – and offshore persons need a working New Zealand bank account to get a New Zealand IRD number.”

The requirements apply to contracts entered into on, or after, 1 October. From 1 April 2016, all additional information must be provided regardless of when the contract was entered into. The main home exemption does not apply to offshore persons or trusts.

“Most people do the right thing and pay their taxes, but there has been some concern that compliance with taxes on certain property transactions – particularly by non-residents – may be relatively low,” Ms Upston says.

“The additional information will help us better understand the housing market, and help Inland Revenue follow up on those people who have tax obligations.

“New Zealanders have a right to know that everyone is paying their fair share of tax. This new legislation will ensure that happens, without affecting New Zealanders who have worked hard and saved to buy their family home.”

Media contacts:
Lesley Hamilton (Minister McClay) 027 490 1345
Libby O’Brien (Minister Upston) 0220 749 670