New Zealand introduces new capital gains tax on residential land
New Zealand has tightened the income tax rules around residential property sales and introduced more compliance steps when selling land.
In summary, the main changes to land-related transactions are as follows:
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- A new tax statement form must be completed for all land transfers. This applies to both vendors and purchasers.
- A New Zealand tax file number (IRD number) is required for non-residents transferring land.
- Foreign tax file numbers must also be supplied by non-residents.
- New IRD number applicants will need a New Zealand bank account. FATCA vetting will be undertaken by the bank.
- A holding period of less than two years will mean that any capital gain is taxable for residential property. This is called a ‘bright-line test’.
- Some New Zealand tax resident home owners will be exempt from these rules.
- New Zealand legislation is likely to introduce an interim withholding tax in 2016.
Marriotts, New Zealand
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