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Authors: Peter Barrett, Mike Brunner
Published: 12 December 2017
Pages: 29

Introduction

The Income Tax Act 2007 (the Act) contains provisions that impose income tax on certain property transactions. Enforcing these tax rules on residents and non-residents alike can be difficult without a complete set of records being provided to Inland Revenue. To deal with these concerns, the government announced a package of measures as part of the 2015 Budget aimed at providing clearer rules for property investors, more useful information to Inland Revenue to help enforce the rules, and increased funding to investigate property tax compliance.

The three stages to the reform included:

• New information requirements for land transfers;
• A two-year bright-line test for residential land transactions; and
• A residential land withholding tax (RLWT) on offshore persons.

These new rules, whilst primarily being tax reforms, will also assist in enforcing New Zealand’s anti-money laundering and countering financing of terrorism rules. At the time of these reforms, the Government stated that these reforms were intended to take some heat out of Auckland’s burgeoning housing market. (continued...)

Content outline

• Information Requirements for Land Transfers
• Bright-Line Test
• Residential Land Withholding Tax
• GST and Land Sale and Purchase Agreements

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