Changes in Property Tax Rules that you need to know about...

The Government’s Taxation (Land Information and Offshore Persons Information) Bill is likely to be passed by the end of September.  The commencement date is set to be 1 October 2015 so there will be very little time to adjust to the changes.

The changes include two property tax proposals:

1. Buyers and sellers of residential property (other than their main home) will be required to:

• provide their IRD numbers at the time of property transfer; and
• provide their Tax Identification Number from their home jurisdiction if they have tax residence in another country.
• offshore persons will be required to provide evidence of a New Zealand bank account in order to obtain an IRD number.

2. Trusts transferring property will be required to:

• provide the Trust’s IRD number instead of the personal IRD numbers of individual trustees. This could be problematic as many Family Trusts do not have an IRD number and this may cause delays in applying for one.

It is important that investors looking to purchase property are prepared for the upcoming changes, should the Bill be passed.

Agents can assist by bringing this to the attention of buyers and sellers who should track down their IRD numbers or apply to Inland Revenue for an IRD number if they do not have one. This should be done as soon as possible to ensure that settlement and registration post 1 October goes smoothly!