We collect tax-related data under the Land Transfer Act 2017 when people buy, sell or transfer property. The legislation also requires us to ask questions that help inform housing policy. This page contains answers to questions about this data.
Collecting these statistics
How were these statistics collected?
Information was collected through a tax statement. Buyers and sellers need to fill out this statement as part of a property transfer.
The statement includes questions about tax residency, New Zealand citizenship or visa status, homes on the property and whether the transfer involves the main home.
Why did LINZ collect this data?
The Land Transfer Act 2017 (and a previous amendment to the 1952 Act) requires LINZ to collect IRD numbers and other tax information. This information is provided to Inland Revenue (IR) and can be used by it to ensure that people buying and selling property comply with their tax obligations.
Some questions have also been asked in order to gather information for housing policy purposes.
Understanding these statistics
What do these statistics say about foreign ownership in New Zealand?
These statistics are not a register of foreign ownership, but they do add to the information available about property transfers in New Zealand. Following changes made to the tax statement used to collect this information, reports covering 2017 show proportions of transfers involving buyers who are not New Zealand citizens or residents, or who hold work or student visas. The report also shows the proportion of transfers involving buyers who have an overseas tax residency, however, tax residency is not the same as nationality.
What does this report tell us about investment in residential property?
The data in this report does not specify whether property has been bought for investment.
While for some transfers the buyers have claimed the main home exemption because they are buying a home to live in, other transfers do not necessarily involve properties bought for investment. They can include property bought for operating a business rather than for a residence, or properties in a trust that will be a main home to some, but not all, of the trustees. It will also include a transfer where the only change is a change of trustees for a property.
What was the value of the property represented in these statistics?
LINZ doesn’t collect data on property values and so is unable to provide any information on this.
Why is the number of transfers so much higher than the number of residential sales recorded by CoreLogic?
We estimate that approximately half of transfers involve a residential sale. The other half includes a very wide range of activities such as deceased estates, trustee changes, marriage settlements, boundary changes, changes to the proportions of shares of ownership, as well as sales involving non-residential property.
Which property sales need to be approved by the Overseas Investment Office?
If overseas residents want to buy ‘sensitive’ land, land of a certain value, location, or size, they need consent from the Overseas Investment Office first.
More information on the Overseas Investment Office can be found on the LINZ website.
What is tax residency?
Tax residency is a term used to define someone’s country of residence for tax purposes and is not the same as nationality. A buyer or seller could be living in New Zealand and still have tax residency in another country. Alternatively they could be an overseas citizen and have only New Zealand tax residency.
You can be a New Zealand tax resident if you are in New Zealand for more than 183 days in any 12-month period and haven't become a non-resident, or have a 'permanent place of abode' in New Zealand, no matter how long they may have been out of the country,
IR also uses other tests to determine if a person is treated as a New Zealand tax resident. For the purposes of this report, we’ve assumed that where a party hasn’t claimed overseas tax residency they are a New Zealand tax resident.
For more information on tax residency, refer to the definition provided on the back of the tax statement.
Who doesn’t need to provide tax residency information?
Tax residency information is not required for sales involving the main home, but you can only claim this if you’re a New Zealand citizen or resident and have been in the country recently (once in the past three years for NZ passport holders and once in the past year for resident visa holders). You can’t use this more than twice in the last two years. For more detail refer to the definition provided on the back of the tax statement.
Tax residency information is also not required from buyers when the transfer involves Māori land or a Treaty Settlement or purchases for government purposes.
Affiliation to New Zealand
What does it mean when it says one or more buyers were NZ citizens or residents? Who were the other buyers in these transfers?
Most property transfers involve multiple buyers. For many of these transfers, all the buyers involved were New Zealand citizens or residents, but there are also transfers that involved both NZ citizens or resident buyers as well as buyers holding other visas, buyers without visas or buyers who were corporate or business entities.
A more detailed breakdown of the combination of buyers and sellers is contained in the supplementary information section of the report.
Why are there a small number of transfers where citizenship information is unavailable?
We introduced an improved tax statement in December 2016 to gather more precise information on citizenship and residency. However, because some property settlements can take months to complete, in 2017 there were still a small number being received that were prepared using the previous version of the tax statement.
Why are people buying property in New Zealand if they don’t have citizenship, residency or a work or student visa?
We only collect some information on buyers’ intentions and so can’t speculate on why property is bought or sold. We do know that in some of these cases, the buyers have immediate family members who have New Zealand citizenship or residency, or a work or student visa.