This page contains answers to common questions about what tax information is required on land transfer tax statements when buying, selling or transferring property.

Note: The following answers are based on the Land Transfer Act 2017 as it applies prior to 1 January 2020, when the main home non-notifiable reason is available.  The amended tax statement will be available in Landonline from 25 November (as part of Release 3.21).

Completing the amended tax statement (from 25 November)

How should I answer question 3B on the amended tax statement?

Assuming that you’ve answered “yes” to question 3A and therefore need to answer question 3B, your answer to question 3B will depend on which of the following scenarios applies:

  • If the transfer will be lodged prior to 1 January 2020, then you should leave question 3B blank
  • If the transfer will be lodged after 1 January 2020 but the agreement for the transfer of the land was entered into prior to 1 January 2020, then you should tick “n/a – transitional period applies”
  • If the transfer will be lodged after 1 January 2020 and the agreement for the transfer of the land was entered into after 1 January 2020, then you should tick either “yes” or “no” as applicable to the particular transfer.

What should I put into the field in Landonline for question 3B?

The information entered in this field should match what you’ve put down in question 3B of the tax statement. So if, for example, you left question 3B in the tax statement blank, then you should also leave the field in Landonline blank. From 1 January 2020, if the answer to question 3A is “yes”, then the field in Landonline for question 3B will no longer be able to be left blank – you will need to select “yes”, “no”, or “n/a”.

The land I am transferring doesn’t have a home on it – do I need to answer question 3B?

No, you only need to answer question 3B if the transfer is a transfer of land that has a home on it.

Can I still claim the main home non-notifiable reason at question 15?

If your transfer is lodged on or after 1 January 2020, you cannot claim the main home non-notifiable reason unless the “transitional period” applies to your transfer.

Does the “transitional period” apply to my transfer?

The “transitional period” applies to your transfer if:

  • an agreement for the transfer of the land was entered into before 1 January 2020 and
  • the instrument of transfer is lodged for registration on or before 1 July 2020.

This means that the provisions of the LTA that applied prior to 1 January 2020 continue to apply to your transfer – you can answer “n/a” to question 3B and you can select the main home non-notifiable reason at question 15, if it applies. These options will no longer be available after 1 July 2020.

Main home

Which is the main home if I own – or have an interest in – more than one?

The one you have the greatest connection to. Think about:

  • where personal property was kept;
  • the time you occupied each dwelling;
  • where immediate family lived
  • where your social ties were strongest;
  • what other ties – employment, business, economic, etc – you had with the area where each dwelling is located.

Who decides if it’s the main home?

The person transferring the property – but knowingly providing false or misleading tax information is an offence. This can result in a fine, if convicted, of up to $25,000 for a first offence or $50,000 for a repeat offence.

What is a ‘main home transfer’?

From 1 January 2020, you will need to specify whether the transfer is a ‘main home transfer’. Question 3B has been added to the land transfer tax statement early to prepare for this change. You do not need to answer this question currently. For more information, refer to the land transfer tax statements page.

Land being transferred has no home built on it

Can a transferee (buyer) claim a main home non-notifiable reason where the main home is yet to be built on the affected land?

Yes, providing the transferee (buyer):

  • is not an offshore person (see section 77(2)(b)(iv) of the Land Transfer Act 2017), and
  • intends to use the land predominantly for a dwelling that will be the transferee’s (buyer’s) main home (see section 77(2)(a)(i) of the Land Transfer Act 2017), and
  • has the intention at the time of signing the tax statement to build a house on the land and use it as their main home.

For example, if the transferee (buyer) intends to build a house to sell or rent, or is not sure whether they will build a house at all, then they would not be able to claim the main home non-notifiable reason.

Note that the answer to Question 3 should always be “No” if the land does not currently have a home on it (“Home” means a dwelling mainly used as a residence e.g. house, apartment, unit, whether tenanted, occupied or not).

Family trusts

What tax information do family trusts need to provide?

Where a family trust is purchasing or selling a property or individual trustees are changing, whether they claim it to be a main home or not, they are still required to provide tax details including the IRD number for that trust. While trustees may be able to claim a main home exclusion from liability to pay tax under section CB 16A of the Income Tax Act 2007, they cannot claim the main home non-notifiable reason under section 77 of the Land Transfer Act 2017 and they must record the trust’s IRD number in the tax statement.  

Trustees’ liability to pay tax on the Inland Revenue website.

Whose IRD number is required for a trust?

Trusts are allocated IRD numbers independently of the trustees in their personal capacity. When a trust transfers property, it is the trust’s IRD number that’s needed.

Some trusts have no taxable income and may not have an IRD number. These trusts will need to obtain an IRD number to complete a purchase, sale or transfer of property (including transfer to give effect to a change of trustees).

Is a family trust able to claim the main home non-notifiable reason?

No. Only individuals (i.e. natural persons) can use the main home non-notifiable reason.

How does a trust answer the questions in the Land Transfer Tax Statement?

A person acting as a trustee of a trust must complete a tax statement for themselves in their capacity as a trustee. Each other trustee must complete a separate tax statement. A trustee cannot submit one tax statement for the trust.

At question 5, the trustee must record their full name, not the name of the trust. This is because the Land Transfer Act 2017 prohibits any reference to trusts on the register.

The trustee should complete questions 9 and 10 with reference to their own and their immediate family’s citizenship and visa details.

When acting as a trustee the main home non-notifiable reason cannot be claimed at question 15.

The trustee will need to insert the trust’s IRD number in question 17. Trusts are allocated IRD numbers independently of the trustees in their personal capacity. When a trust transfers property, it is the trust’s IRD number that is needed.

Immediate family

Who is considered to be my "immediate family"?

For questions 10, 12 & 13 of the land transfer tax statement, “immediate family” is considered to be a person who is:

  • your spouse, civil union partner, or de facto partner
  • your parent, sister, or brother
  • your child, or a child’s spouse or partner, or
  • the parent, child, sister, or brother of your spouse, civil union partner, or de facto partner.

Information that sellers and buyers need to provide (Inland Revenue website).

Offshore persons

Who is an offshore person?

An offshore person is defined in section 3 of the Tax Administration Act 1994. For an individual it means:

  • a New Zealand citizen who is outside New Zealand and has not been in New Zealand within the last 3 years
  • a person who holds a residence class visa granted under the Immigration Act 2009, and who is outside New Zealand and has not been in New Zealand within the last 12 months, or
  • a person who is not a New Zealand citizen and who does not hold a residence class visa granted under the Immigration Act 2009.

For a body corporate or an unincorporated body of persons, including a trust or a unit trust, it means a person who would be an overseas person under section 7(2)(b) to (f) of the Overseas Investment Act 2005.

If an offshore person buys or sells their main home, are they exempt?

No. Offshore persons are not exempt from providing tax information.

Are you an offshore person if you’ve only visited New Zealand for a short time?

If you’re a New Zealand citizen living overseas, but have visited New Zealand in the past three years (even just for a day), you’re not an offshore person.

If you’re a New Zealand resident living overseas, and have visited in the past year, you’re not an offshore person.

In both cases, you don’t have to provide a bank account to apply for an IRD number, and can claim the main home non-notifiable reason.

Overseas taxpayers

Is my overseas Tax Identification Number (TIN) needed if I live in New Zealand?

If you file a tax return overseas, you’ll need to provide the TIN for that jurisdiction – even if you live in New Zealand – unless you’re buying or selling your main home.

What if I have more than one TIN?

If you’re a tax resident overseas, you must provide all relevant TINs from each jurisdiction where you’re a tax resident.

Only provide the numbers where you pay tax, not historic numbers. For example, if you have a TIN from working during your OE, but are no longer tax resident in that country, don’t provide it.

Relationship property settlements

What tax information is required for a relationship property settlement?

Even if someone is exempt from paying tax under the bright line test, they usually still need to provide a tax statement and, unless they have a non-notifiable reason not to, an IRD number. 

If the property was, or will be, a main home then an IRD number isn't needed.

See how property tax applies to a relationship property settlement example

Estates

What happens with estates?

Where property is transferred from an estate to a beneficiary under the will or the rules governing intestacy, executors/administrators do not have to provide an IRD number. Beneficiaries, or anyone who purchases from an estate, are required to provide an IRD number. Where executors/administrators are transferring estate property to someone other than a beneficiary or not in terms of the will, the executor/administrator would need to provide the estate’s IRD number.

Mortgagee and Court-ordered sales

What happens with forced sales – such as mortgagee sales or sales as a result of court order?

If property is sold by mortgagee sale, the transferor is the mortgagee/bank and does not need an IRD number – however the purchaser does, unless it is their main home.

If property is sold as a result of a Court order (such as a sale under a charging order), the transferor does not need an IRD number, however the purchaser does unless it will be their main home.

Local authorities and Government agencies

Are transfers to local authorities or Government agencies exempt?

Tax-exempt public authorities or local authorities, as defined in the Income Tax Act 2007, do not need an IRD number when transferring land.  This includes departments and departmental agencies but not wider Crown entities or Council Controlled Organisations.

For example, if the Ministry of Education sells school buildings and land to an individual developer, it doesn’t need to provide its IRD number but the developer would.

Nominees and nominations

Is it the nominee or nominator who must provide tax information?

When completing the tax statement, be aware that the terminology used in respect to 'nominee' differs to that normally used in conveyancing.

For the tax statement, the 'nominee' is defined in section YB21 of the Income Tax Act 2007 and is the person who does, or holds, on behalf of someone else (the 'nominator').  The person who has decision-making power, or who takes the profit from the sale, is the 'nominator'.  It is the 'nominator' who must provide tax details.

See the case study 'Nominators and nominees' for more information

How is nominator tax information entered in Landonline?

The Landonline Prepare Tax Statements screen provides for entry of a nominator name using the following steps: 

  1. Prepare the transfer as usual and the Transferor and Transferee names will display in the Prepare Tax Statements screen.
  2. The nominee’s name as transferor or transferee will populate automatically in question 5 while the name of one of the nominators should be entered at question 7. The remaining questions should be completed using the nominator’s information.
  3. The paper statement must be signed by the transferor or transferee who is acting as nominee.

How is tax information entered in Landonline for multiple nominators?

If a transferor or transferee is acting on behalf of multiple nominators, a tax statement is required for each nominator, however only one set of information can be recorded in Landonline against the transferor or transferee who is acting as nominee.

Prepare the required statements and have them signed by the nominee as described in step 3 of the above FAQ “How is nominator tax information entered in Landonline?”. You should then choose one for entry to Landonline. Lawyers and conveyancers are required to retain a copy of every tax statement they receive, so information on the other nominators will still be accessible on request from Land Information New Zealand or Inland Revenue.

How is tax information entered in Landonline when there is a Deed of Nomination?

For this discussion the Deed of Nomination will result in the nominee taking possession of property in their own right and they will not be acting on behalf of the nominator so are not considered a ‘nominee’ for the purposes of completing the tax statement (refer to the definition of a nominee in our FAQ "Is it the nominee or nominator who must provide tax information?").

For example:

There is an agreement for sale and purchase from Person A to Person B. B also has a Deed of Nomination to C. One transfer is prepared for registration from A to C. In this case, the following steps should be used:

  1. Prepare the transfer as usual and the Transferor (A) and Transferee (C) names will display in the Prepare Tax Statements screen.
  2. Enter tax information for A and C being their own tax details -  do not enter any tax information for B nor make reference to B in the tax statement.

Companies and partnerships

How does a company answer the questions in the Land Transfer Tax Statement?

A person completing a tax statement on behalf of a company should record the company’s full name at question 5, then select “entity” in question 6 and proceed to question 14. The company’s tax information should then be recorded in the relevant spaces.

Transfers of multiple titles

How is tax information entered in Landonline for a single transfer of multiple titles?

Each transferee (buyer) and transferor (seller) will need to provide a tax statement with full tax details unless they can claim a non-notifiable reason that is applicable to all records of title in the transfer. For example, a seller may not claim a main home non-notifiable reason if the total land area being transferred has not been predominantly used as their main home.

This means, for each individual transferee (buyer) and transferor (seller) :

  • if a single non-notifiable reason is claimable for the combined title area, this may be recorded against the individual to which it applies and no tax statement is required
  • if a single non-notifiable reason is claimable for the combined title area, a tax statement is required, but no tax details are required
  • if a non-notifiable reason is claimable for one title, but not the others, a tax statement with full tax details is required
  • if a different non-notifiable reason can be claimed for each of the titles being transferred, but no single non-notifiable reason can be applied to all titles, the buyer or seller must provide a tax statement with full tax details.

Alternatively, the transaction could be split into multiple transfers, however this would result in additional registration fees. 

Getting an IRD number

How do you get an IRD number?

Apply in writing to Inland Revenue. If you apply on behalf of a trust, you must provide all trustees’ names and a copy of the trust deed.

Applying for an IRD number on the Inland Revenue website

Got a question?

For registered Landonline users, submit a 'Titles Information' request in Landonline.

For other users, send an email to customersupport@linz.govt.nz

Before you submit an enquiry, check the Land transfer tax statements main and common scenarios pages and the notes section of the Tax Statement form. We cannot provide advice about how to answer the questions in the tax statement.

 

Last Updated: 18 November 2019