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Taxation (Land Information) Legislation
Information for Sellers and Buyers – what you need to know
What you need to know:
The sale or purchase of
land in New Zealand will be caught by this legislation.
It applies to all contracts for the sale and purchase of any land in New Zealand entered into on or after 1 October 2015.
Sellers and Buyers who enter into contracts on or after 1 October 2015 will need to provide a New Zealand IRD number before the settlement can take place and possession can occur.
It will also apply to contracts entered into before 1 October 2015 where settlement date is on or after 1 April 2016. (Otherwise for contracts that were entered into before 1 October 2015 and will settle before 1 April 2016 this legislation will not apply.)
What Sellers and Buyers need to provide:
Sellers and Buyers will need to provide their lawyer with their New Zealand IRD number.
All Sellers and Buyers will need to complete and sign a Tax Statement before settlement can occur and possession can be given and taken.
“Offshore” Sellers and Buyers will need to provide a New Zealand IRD number or obtain a New Zealand IRD number before the settlement date. (All “Offshore” Sellers and Buyers without a New Zealand IRD number will need to get a New Zealand bank account opened before applying for a New Zealand IRD number). Offshore parties also need to provide their tax number/details from their country of origin.
An “exemption” may apply where private individuals only are selling their “main home”.
Whether this “exemption” applies depends upon a variety of factors. Advice must be taken from your accountant or lawyer.
Entities such as trusts, companies, partnerships, charitable trusts and the like must provide an NZ IRD number for their particular entity (not individual partners or trustees)in all cases.
Each individual seller or buyer must provide their own Tax Statement to their lawyer.
Without the Tax Statement the seller or buyer’s lawyer cannot complete settlement and delays may occur.
This information sheet is provided as an indicative guide only. You are recommended to consult your own accountant or lawyer concerning your personal circumstances and the requirements to complete a Tax Statement before entering into a contract to sell or buy land in New Zealand.
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