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.
What’s changing?
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:
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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.
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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.
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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.
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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:
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contract for the transfer is entered into before 1 October 2015, and
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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:
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you can make deposits and withdrawals
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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.
