IMPORTANT MESSAGE - Changes to property and IRD number rules
A number of property tax rules Government proposed as part of Budget 2015 have just been passed into law and will apply from 1 October 2015.
Inland Revenue have created a webpage about these changes for people who buy, sell or transfer New Zealand property. Please take a look and share this link with people who may be interested: www.ird.govt.nz/propertychanges
In brief, here’s what’s changing from 1 October 2015:
When buying, selling or transferring New Zealand property:
unless the property is their main home, New Zealand citizens and residents will provide an IRD number and a taxpayer identification number (equivalent of an IRD number) from any other countries where they have to pay tax on their worldwide income.
offshore people and entities will supply a New Zealand IRD number and a taxpayer identification number from any country where they currently have to pay tax on their worldwide income.
people transferring a property that’s in trust will provide an IRD number for the trust. An individual trustee’s IRD number can’t be accepted.
people and entities offshore and people with property in trust aren’t eligible for the main home exemption, so will supply a New Zealand IRD number.
Some New Zealand citizens and residents will need to follow the requirements for offshore people. See www.ird.govt.nz/propertychanges for details.
People buying, selling or transferring property will provide the information above to their property lawyer or conveyancer. They may choose to do this by filling in a Land Transfer Tax Statement, which will be available on Land Information New Zealand’s (LINZ) website.
Some people will be partway through the process of buying, selling or transferring a property on 1 October 2015 when these new rules come into effect. These new rules will not apply where the:
contract for the transfer is entered into before 1 October 2015, and
transfer is registered with LINZ on or before 1 April 2016.
IRD number application changes on 1 October 2015
On 1 October 2015 offshore people and entities must have a fully functional New Zealand bank account before applying for a New Zealand IRD number.
A fully functional bank account is one where:
you can make deposits and withdrawals
the account holder's identity is verified in line with New Zealand legal requirements.
To collect this information, on 1 October Inland Revenue will introduce two new IRD number application forms for people who are non-residents or offshore: one for individuals and another for companies, trusts, partnerships and other entities.
Please contact our friendly BM team if you have any queries 06 876 7159.