How Revenue Minister McClay will tax foreign property investors
McClay releases details on foreign property buyer tax crackdown.
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Hawke’s Bay
The government is fleshing out the detail on its measures to tax more offshore property buyers.
Revenue Minister Todd McClay today released a discussion document outlining the resident land withholding tax (RLWT), aimed at foreign investors who buy and sell New Zealand property for capital gain.
Someone who buys a property for $610,000 and sells it for $820,000 within the two year “brightline” test should be liable for tax on the $210,000 capital gain.
Under the rules being proposed, the withholding tax is calculated as the lower of either 10% of the total value of the property sold, or 33% of the capital gain.
In this case, the choice is either $82,000 – being 10% of the value of the property being sold – or 33% of $210,000 – which, being $69,300, is the amount that would be withheld by the Inland Revenue.
Solicitors and conveyancers are to collect the tax on behalf of the IRD.
People whose sales make a loss will be able to claim a rebate, the revenue minister says.
Submissions close on October 2.
The changes are to take place from July 1 next year.
RAW DATA:
- Withholding tax consultation paper (pdf 174.33 KB)
- Withholding tax summary (pdf 3.68 MB)
- Withholding tax Q&As (pdf 228.21 KB)
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Rob Hosking
Mon, 31 Aug 2015
Mon, 31 Aug 2015
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How Revenue Minister McClay will tax foreign property investors
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