Inland Revenue – What we’re seeing 2016

  • The introduction of the Bright-line test means if you buy and sell a residential house within two years from 1 October 2015 you probably have to pay income tax on any profit (limited exemptions apply). The IRD now takes a hard line and identifies properties sold within 2 years and asks for details surrounding the transaction. They even have a special form (IR833).
  • Anyone purchasing or selling a house in New Zealand now has to have a NZ bank account and IRD number, and non-residents must provide their tax identification number. This is due in part to NZ anti-money laundering legislation.
  • Last minute panic for IRD numbers – everyone now needs an IRD number to buy or sell a house, but many family trusts that own homes don’t have an IRD number. This can cause last minute panic or delayed settlement as IRD numbers can take up to a week to process.
  •  IRD now have greater knowledge sharing with other organisations such as LINZ and overseas tax identification and pension organisations to identify non-compliance of tax laws.
  • The Budget has provided $29 million of extra funding specifically to assist with ensuring compliance around
    property tax.

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