New Zealand: Withholding tax on sales of residential property

NZ: Withholding tax on sales of residential property

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.


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The issue paper on the withholding measures confirms that the residential land withholding tax would:

  • Apply to New Zealand property that is subject to the bright-line test if the seller is an “offshore person”
  • Be the lower of 33% of the gain on sale, or 10% of the agreed purchase price
  • Be collected by the conveyancing agent (or purchaser, if there is no agent)

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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