The third part of the property tax package proposed in the budget 2015 provides for a residential land withholding tax on offshore sellers. These withholding tax measures have been released, thereby completing a “trifecta” that also includes new tax disclosure requirements and a bright-line test for taxing residential land.
The issue paper on the withholding measures confirms that the residential land withholding tax would:
The withholding tax would apply when the property transfer settlement occurs on or after 1 July 2016.
Submissions concerning the issue paper are requested by 2 October 2015.
Those conveying residential property and lawyers involved in closing transactions need to note the proposed withholding tax could affect their business operations.
Read a September 2015 report [PDF 582 KB] prepared by the KPMG member firm in New Zealand: Withholding tax on foreign property sellers
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