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:

• 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.