New Zealand has recently taken measures against money laundering and tax evasion. The government introduced the Taxation (Land Information and Offshore Persons Information) Bill that aims at detecting people who intentionally avoid their tax obligations. The bill proposes two measures that focus on strengthening property tax rules, namely:
- During the process of property transferring, buyers and sellers are required to provide a valid IRD number (an eight or nine digit unique New Zealand tax identification number). People who are residents in another country are required to submit the Tax Identification Number of their home country.
- Foreign persons who would like to obtain an IRD number in New Zealand will be required to open a bank account in one of the banks in New Zealand and submit the bank account number to the tax authorities. This requirement also applies to New Zealanders who have not resided in the country for a period of three or more years.
Land Information Minister, Louise Upston, stresses the importance of the new amendment by claiming that: “while it’s not illegal to trade property to make a gain, property traders are subject to the tax rules like everyone else. The proposals in this bill will see Land Information New Zealand and Inland Revenue collaborating to ensure fairer taxation of people buying and selling residential property for profit.”