Implications for Land Transactions
Budget 2015: Implications for Land Transactions
A number of issues addressed in the government’s recently announced budget will affect land transactions as from 1 October 2015.
Sale within two years
Any residential property (whether in Auckland or elsewhere) that is bought and sold within two years will now be deemed to be subject to tax. A “bright line” test is therefore being introduced to supplement the general rule that anyone buying with the intention of selling for a gain is liable for tax on the gain.
There are, however, exemptions for:
· the family home;
· property that has been inherited; and
· property that has transferred being part of a relationship property settlement.
The government is to release an issues paper in July which will provide further detail on the new measures.
In addition, all non-residents and New Zealanders buying and selling any property other than their family home, will need to provide a New Zealand IRD number as part of the usual land transfer process with Land Information New Zealand. Non-residents will also be required to provide their tax identification number from their home country, and will also need to have a New Zealand bank account before they can get an IRD number when purchasing a property.
We will of course be monitoring the further details as they are released.