Changes to property and IRD number rules from 1 October 2015

Changes taking place from 1 October 2015 are:

When buying, selling or transferring New Zealand property:
  • Unless the property is their main home, New Zealand citizens and residents will provide an IRD number and a taxpayer identification number (equivalent of an IRD number) from any other countries where they have to pay tax on their worldwide income.
 
  • Offshore people and entities will supply a New Zealand IRD number and a taxpayer identification number from any country where they currently have to pay tax on their worldwide income.
 
  • People transferring a property that’s in trust will provide an IRD number for the trust. An individual trustee’s IRD number can’t be accepted.
 
  • People and entities offshore and people with property in trust aren’t eligible for the main home exemption, so will supply a New Zealand IRD number.
 
 
  • People buying, selling or transferring property will provide the information above to their property lawyer or conveyancer. They may choose to do this by filling in a Land Transfer Tax Statement from Land Information New Zealand (LINZ). A tax statement will be required for all properties to settle as part of the legal process.
 
  • Some people will be partway through the process of buying, selling or transferring a property on 1 October 2015 when these new rules come into effect. These new rules will not apply where the:
  1. Contract for the transfer is entered into before 1 October 2015, and
  2. Transfer is registered with LINZ on or before 1 April 2016.
 
IRD number application changes on 1 October 2015

On 1 October 2015 offshore people and entities must have a fully functional New Zealand bank account before applying for a New Zealand IRD number.

A fully functional bank account is one where:
  • You can make deposits and withdrawals
  • The account holder's identity is verified in line with New Zealand legal requirements.
 
To collect this information, on 1 October Inland Revenue will introduce two new IRD number application forms for people who are non-residents or offshore:  one for individuals and another for companies, trusts, partnerships and other entities.

The IRD will also update their existing application forms to include just the information New Zealand citizens and residents need to provide when they apply for an IRD number.

The IRD will also continue to accept current IRD number application forms up until new forms are introduced on 1 October 2015.