Aucklanders viewing properties elsewhere
27th Jun
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Ph 0800 828 222
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The New Zealand Herald has today reported that PM John Key announced this morning that the capital gains of people selling residential property within two years of buying it will now be taxed.
This change will take effect from 1 October, with the aim of addressing Auckland’s widely reported and seemingly irrepressible house inflation march. Mr Key made the announcement at the National Party's lower North Island conference at Silverstream.
The exemptions to the CGT slug, according to the NZ Herald, “will be if the property sold is the seller's main home, if it is part of a deceased estate or inherited, and or if it is transferred as part of a relationship settlement.”
New disclosure rules will also provide the Government information about the residence status of those buying property. All buyers and sellers of property (other than a main home) will have to supply an IRD number to Land Information New Zealand, and all non-residents will only be able to get an IRD number after opening a New Zealand bank account.
“That information”, states the Herald, “will help IRD to work out who is trading property for the purpose of making capital gain.”
The PM also announced a additional pool of money would be made available in the budget to the IRD for tax compliance. Increased compliance and enforcement activity is expected to earn the government handsome returns on its budget investment over the next couple of years.
The report also cited Mr Key as saying that the Government would also investigate introducing a withholding tax for non-residents selling residential property. The government is a certain winner from these changes, and only time will tell whether it all turns out to be anything more than just another squeeze on tax paying local investors.