From the 1st October 2015 new rules come in to force surrounding the buying and selling of property in New Zealand, including a new test designed to catch and tax individuals making profits from the sale of properties that they have owned for only a short period of time.
From October 1 all NZ residents and citizens must supply their IRD number when they buy or sell any NZ property that is not their main home.
For non-NZ residents or citizens, they must supply their IRD number and taxpayer identification number (if they have one) when purchasing any property in NZ, regardless of whether or not it will be their main home.
There is also a “Bright Line Test” (which is currently awaiting its second reading in Parliament) which has been designed to help IRD identify residential property speculators and tax them accordingly.
This proposed test will require taxpayers to pay tax on any capital gain made from the sale of a residential property that has been purchased and sold within two years, unless that property was the taxpayer’s main home, inherited or transferred as part of relationship property.
If you are in the process of purchasing a property or plan to in the future and would like advice regarding the new rules please contact our office.