This page outlines a number of scenarios which detail how the new property tax compliance requirements will apply.
Gladys’ home is owned by a family trust, with her children – Bob, Dan and Louise – being the trustees. When Bob died, it was decided that his son, Tom, would replace him as a trustee – meaning a change of trustee needs to be registered on the property title.
This requires a tax statement with the trust’s IRD number. If the trust doesn’t have an IRD number, a written application must be made to Inland Revenue for an IRD number for the trust. The application must include all trustees’ names and a copy of the trust deed. This must happen before the trustee change can be registered in Landonline.
Putting the family home in trust
Yvonne lives in her own home but, with Michael moving in with her, she decides to protect her family’s assets and transfer the house to a family trust.
Yvonne and her daughters – Suzanne and Judith – will be the trustees, and will appear on the property title as the owners
As the property is Yvonne’s main home, her tax statement – as transferor – doesn’t need to include her IRD number. Because trusts are not eligible for the main home exemption, the transferee tax statement must include the trust’s IRD number.
This means Yvonne must apply in writing to Inland Revenue to get an IRD number for the trust. The application must include all trustees’ names and a copy of the trust deed.
Jim and Maureen have undivided shares in a matrimonial property and a rental property. After their divorce, they reallocate their marital assets and Jim becomes legal owner of the properties.
They don’t need to provide their IRD numbers to transfer the matrimonial property to Jim because the main home exemption applies – but they must provide their IRD numbers to transfer the rental property to Jim.
Tāmati buys his first home through a mortgagee sale and completes a tax statement. As the property will be his main home, he doesn’t need to provide his IRD number.
The bank – as mortgagee – must also complete a tax statement, but doesn’t have to provide its IRD number because mortgagee sales are exempt from this requirement.
Sale to offshore person – for student
Bobby is moving to New Zealand from the US to study at Auckland University. He needs somewhere to live, so his father Chad is buying Joanne’s house.
As Joanne lives in the house, she doesn’t need to include her IRD number on her tax statement. Chad must complete the tax statement, open a New Zealand bank account, and then apply for an IRD number. His tax statement will contain his US Tax Identification Number and IRD number.
He must also provide information that he’s buying a home; has a family member who has a student visa; and that the family member will live in the home.
Sale to offshore person who intends living in New Zealand
Ex-Londoners Jade and Rob live in Queenstown, have applied for New Zealand residency, and bought Lucy and Steve’s home to live in.
Without residency, they are offshore persons and the main home exemption doesn’t apply. They must complete the entire tax statement, and provide their UK Tax Identification Number and IRD number. They must also provide information that they’re buying a home, don’t have residency, and will live in the home.
Lucy and Steve must both fill out tax statements but – as they’re selling their main home – don’t need to provide their IRD numbers.
Lucy and Steve also own an Auckland apartment. Steve works in Auckland and returns to Queenstown to spend weekends with Lucy. They’ve sold the apartment to Ron, who will rent it out. Lucy, Steve and Ron must all complete tax statements and provide their IRD numbers as the property is not a main home.
Phillip and Ralph have lived in London for the past 10 years. They last visited New Zealand four years ago, and have decided to move back. They’ve bought Josie’s rental property – a Wellington apartment – to live in.
As offshore persons, Phillip and Ralph must both complete a tax statement with their UK Tax Identification Number and IRD number. If they’d visited in the past three years – even for a day – they wouldn’t be offshore persons and wouldn’t have to provide Tax Identification Numbers, including the IRD number. They must also provide information that they’re buying a home, and are New Zealand citizens.
Josie must complete the whole tax statement, including her IRD number.
Buying a farm
Dave and Sally own a farm and live in the farmhouse. Sharon and Pete are buying the farm and will live in the farmhouse. All four must complete the full tax statement – including their IRD numbers – as the sale relates to the farm, not the house.
Selling three times in two years
Bill and Margaret sold their Parnell home and, in January, bought a new one in Mission Bay. They don’t need to provide an IRD number because the sale is covered by the main home exemption.
In July that year, they decide to move to Christchurch and sell their new Mission Bay home. Again, their IRD number isn’t needed as they’re still covered by the main home exemption.
Bill has a fall in March of the following year, and they sell the Christchurch house and move to a retirement village. They will need to provide their IRD number for this transfer as they are no longer covered by the main home exemption.
Sarah is an overseas investor who wants a property in New Zealand. Her son Junior lives in New Zealand and buys it on her behalf. Junior’s name will be on the property title, but Sarah makes all the decisions – Junior is the ‘nominee’ and Sarah the ‘nominator’. Sarah is responsible for any tax to do with the property, so a tax statement with her IRD number and TIN are needed when Junior buys – and later sells – the property on her behalf.
Mr and Mrs Smith are selling their rental property, and are both listed on the title. Mr Smith signs the sale and purchase agreement on their behalf – he is the ‘agent’ for the sale. As both Smiths are on the property title, they are both transferors – so they must both complete a tax statement and provide their IRD number and/or TIN.
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