Important Taxation Changes – Buying and Selling Land
What you need to know
The sale or purchase of ALL land in New Zealand will be caught by this legislation.
It applies to all contracts for the sale and purchase of any land in New Zealand entered into on or after 1 October 2015.
If you sign a contract to sell or buy land on or after 1 October 2015 you will need to provide us with a tax statement including your New Zealand IRD number before settlement can take place and possession occurs.
It will also apply to contracts entered into before 1 October 2015 where settlement date is on or after 1 April 2016. (Otherwise for contracts that were entered into before 1 October 2015 and will settle before 1 April 2016 this legislation will not apply.)
What you will need to provide us with:
- You will need to provide Glaister Ennor with your New Zealand IRD number.
- You will need to sign a Tax Statement before settlement can occur and possession can be given and taken.
- “Offshore” clients will need to provide their New Zealand IRD number or obtain a New Zealand IRD number before settlement. (All “Offshore” Sellers and Buyers without a New Zealand IRD number will need to get a New Zealand bank account opened before applying for a New Zealand IRD number). Offshore clients that are tax domiciled outside New Zealand will need to provide their tax number/details from their country of origin.
New Zealand domiciled clients do not need to open a bank account in order to obtain an IRD number.
An “exemption” may apply where you as private individuals are selling your “main home”.
Whether this “exemption” applies depends upon a variety of factors. You will need to consult us at Glaister Ennor over this exemption.
Trusts cannot get this “exemption”. Accordingly trusts, companies and such entities must provide an NZ IRD number for those particular entities in all cases.
Each individual client who is buying and selling will need to sign their own separate tax statement when signing the transfer.
Without the Tax Statement we cannot complete settlement for you, and delays may occur.
NOTE: This information sheet is merely a guide only. We urge all clients to consult us concerning their personal circumstances and the requirement to complete a tax statement before entering into a contract to buy and sell land in New Zealand.
Source: InBrief Sprint 2015