New Zealand Enacts Property Tax Changes
New Zealand’s Inland Revenue Department (IRD) announced on September 23, 2015, that two new acts, the Land Transfer Amendment Act 2015 and the Tax Administration Amendment Act 2015, received Royal Assent to strengthen property investors’ tax compliance.
Under the new legislation, three changes will apply from October 1, 2015, for property other than taxpayers’ principal residences:
- Information will be required to be supplied to Land Information New Zealand (LINZ) upon transfer of property as part of the usual land transfer process. In particular, persons transferring any property (other than New Zealand individuals transferring their main home) must provide: their New Zealand IRD number and their tax identification number from their home country if they are currently tax resident overseas.
- To ensure that New Zealand’s full anti-money laundering rules apply to non-residents before they buy a property, offshore persons must have a New Zealand bank account before they can get a New Zealand IRD number.
- A new “bright-line” test will be introduced for sales of residential property, to supplement Inland Revenue’s current “intentions” test. Under this new test, gains from residential property sold within two years of purchase will be taxed, unless the property is the seller’s main home, inherited from a deceased estate or transferred as part of a relationship property settlement.
