Overview

The Taxation (Land Information and Offshore Persons Information) Bill proposes changes to the Land Transfer Act 1952 and the Tax Administration Act 1994 in order to get better tax information from all people dealing in land and to promote the enforcement of tax obligations of offshore persons generally.

The first key proposal of the Bill requires buyers and sellers of property to present an IRD number (and their foreign equivalent of an IRD number if applicable) to Land Information New Zealand as part of the land registration process. The IRD number equivalent will not apply to a New Zealand individual if they are buying or selling their main home.

The second key proposal of the Bill requires offshore persons to have a New Zealand bank account as a prerequisite to obtaining an IRD number.

Twelve written submissions were received by the Committee, with two of those submissions identified by officials as dealing with issues that are not contained in the Bill. Both submissions concern the proposed bright-line test and officials recommend that the Committee forward the submissions to the appropriate Inland Revenue officials.

Generally submitters were broadly supportive of the policy objectives of the Bill. Some concerns were raised in relation to ensuring that compliance costs are minimised.

A particular concern raised by some submitters was the need for appropriate guidance to determine whether the main home exemption applies. Officials agree that comprehensive guidance should be provided to buyers and sellers. A communications programme to inform buyers, sellers and conveyancers in plain English will be provided as part of the implementation of the changes.

Officials have also proposed several technical and drafting changes.