Taxation (Land information) Legislation

In News by Cliff Lyon

This is information that all sellers and buyers need to know about taxation.

  • The sale or purchase of all land in New Zealand is 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.
  • Sellers and buyers who enter into contracts on or after 1 October 2015 will be required to provide a NZ IRD number before settlement can take place and this means, that unless special arrangements have been made between the parties, before possession can be given and taken.

What sellers and buyers need to provide

  • Sellers and buyers will need to provide their lawyer with their NZ IRD number.
  • All Sellers and buyers will need to complete and sign a tax statement before settlement can occur and usually possession given and taken.
  • “Offshore Sellers and buyers will need to provide a New Zealand IRD number or obtain a New Zealand IRD number before settlement date. All “Offshore” sellers and buyers without a New Zealand IRD number will need to open a New Zealand bank account before applying for a New Zealand IRD number. Offshore parties also need to provide their tax number details from their country of origin.
  • An exemption may apply where private individuals only are selling their “main home”
  • Whether this exemption applies depends upon a variety of factors about which you should take advice from your solicitor.
  • Entities such as trusts, companies, partnerships, charitable trusts and the like must provide an NZ IRD number.Each individual seller or buyer must provide their own tax statement to their lawyer.
  • Without the tax statement the seller or buyer cannot complete settlement and delays will most probably occur possibly resulting in penalties and additional cost.