property tax rules bill introduced
TRANSCRIPT
Property tax rules bill introduced
The Taxation (Land Information and Offshore Persons Information) Bill was introduced yesterday. Itcontains two proposals announced as part of Budget 2015 to strengthen the property tax rules:
- The requirement to provide an IRD number at the time of property transfer (and a TaxIdentification Number for people resident in another country).
- The requirement for offshore persons to provide a New Zealand bank account number to obtain anIRD number.
For more information see the Ministers' media statement and regulatory impact statements.
Hon Todd McClay
Minister of Revenue
Hon Louise Upston
Minister for Land Information
23 June 2015
Media statement
Bill to strengthen property tax rules introduced
Revenue Minister Todd McClay and Land Information Minister Louise Upston have welcomed theintroduction of a new bill which will help Inland Revenue enforce the tax rules around property.
The Taxation (Land Information and Offshore Persons Information) Bill containing proposedamendments to the Land Transfer Act and the Tax Administration Act was introduced intoParliament yesterday by Ms Upston. The bill contains two of the property tax proposals announcedas part of Budget 2015:
Buyers and sellers of property will be required to provide their IRD numbers at the time of propertytransfer. Those who are tax residents in another country will also have to provide their TaxIdentification Number from their home jurisdiction. There will be an exemption for New Zealandresidents' main home.
And to ensure our anti-money laundering rules apply, we'll require overseas people to have a NewZealand bank account to get a New Zealand IRD number. This will also apply to New Zealanderswho have been out of the country for three or more years.
"These measures provide extra information which will help Inland Revenue detect people seeking toavoid their tax obligations. When people try to get out of paying tax, it's unfair to all those peoplewho do pay," Mr McClay says.
"While it's not illegal to trade property to make a gain, property traders are subject to the tax ruleslike everyone else. The proposals in this bill will see Land Information New Zealand and InlandRevenue collaborating to ensure fairer taxation of people buying and selling residential property forprofit," Ms Upston says.
The bill is due to have its first reading this week and it will then be referred to Select Committee forconsideration and public consultation. The bill is expected to be reported back to the House in timeto be passed in late September and it will take effect from 1 October.
Mr McClay says as announced in Budget 2015, further legislative changes are in the pipeline.
"I intend to release a public consultation document later this month seeking views on implementingthe other major Budget announcement - the introduction of a 'bright line' test which would makegains from the sale of certain residential properties sold within two years of purchase taxable.
"Under this test an exemption will apply when the property is the seller's main home, is inheritedfrom a deceased estate or is transferred as part of a relationship property settlement.
"Most people in New Zealand do the right thing and pay their tax. Inland Revenue will help you getit right, but for those who try to avoid paying, we're making it harder to get away with it," MrMcClay says.
Media contacts:
Lesley Hamilton (Minister McClay) 027 490 1345
Libby O'Brien (Minister Upston) 022 0749 670
http://taxpolicy.ird.govt.nz/news/2015-06-23-property-tax-rules-bill-introduced