Safe as houses
IMPORTANT: This post is specific to New Zealand. If you are not a New Zealand business/taxpayer then it is probably not applicable to you.
The suspense about whether and when a capital gains tax would be introduced to New Zealand seems to have been drawn out for well over a decade. OK, the suspense is over now. Are you relieved? The focus in this budget is on damping down property speculation rather taking a slice off the family home. There will be a two-year window for sales of residential property. If a residential property is bought and sold within two years, it will be subject to tax. This does not apply for:
- taxpayers selling their family home
- inherited property, and
- property that is being transferred as part of a relationship property settlement
The new rules will apply to properties bought on or after 1 October 2015. More detail is expected to come out in July.
It’s important to note that if you intend to sell a property outside of the 2 year timeframe, the sale may still be subject to tax, as it may still fall within other rules relating to the taxation of property. Please contact us if you are selling a property to see what rules apply.
In addition, anyone buying or selling land – both New Zealand residents and non-residents – will have to provide an IRD number as part of the land registration process. All sales of land – other than sales of the main family home – will be subject to this requirement.
In addition to providing a New Zealand IRD number, non-residents will also have to:
- provide their country’s equivalent of an IRD number, and
- open a New Zealand bank account