Question:

New Rules for Foreigners buying New Zealand Property

Answer:

Recent changes are outlined below:

July 1, 2022

Loss carry back for eligible companies extended to cover 2023 income year.
Professional firm profits diverted to the professional's spouse or other associates to be reviewed under new Tax Office guidance.
Corporate collective investment vehicle legislative regime introduced.
Temporary full expensing of depreciating assets extended to include 2023 income year.
Depreciable assets of a company joining a tax consolidation group have tax costs setting rules modified for assets depreciated under temporary full expensing rules.

December 9, 2021

Reduced Pandemic leave disaster payment of $750 per week made available through to 30 June 2022.

August 5, 2021

COVID-19 Disaster Payments are non-assessable non-exempt income in 2021 income year and later. Payments phasing out as vaccination rates increase.

July 1, 2021

New Investment Engagement Service launched for businesses planning significant new investments in Australia.
Tax Office small business independent review service made permanent for businesses with turnover < $10m, for income tax, GST, exercise, luxury car tax, wine equalisation tax and fuel tax credits. Requested before amended assessment issued.
Small business income tax offset for individuals increased to provide a reduction of 16% for a tax payable up to $1,000.
Self-managed superannuation funds can now have six members, increased from four members previously.

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July 1, 2021

Some COVID -19 state and territory business grants received by small and medium enterprises are non-assessable, non-exempt income for 2021 and 2022 income years.
Certain state, territory and local government financial support for individuals and businesses suffering COVID-19 impacts made exempt where businesses have turnover less than $50 million and only in eligible programs.

March 31, 2021

JobKeeper payments scheme ended.

October 5, 2020

Boosting apprenticeship commencements subsidy (up to 50% of apprentice's wages) is assessable income.

June 4, 2020

Homebuilder grant for new home or substantial renovation construction is not subject to income tax.

April 1, 2020

COVID-19 cash flow boost payments are not subject to income tax

On 16 May, the New Zealand Finance Minister announced that from 1 October 2015, gains on residential property in New Zealand sold within two years of purchase will be subject to a new “bright line” test, which will be introduced in respect of residential property. There will be a rebuttable presumption that if you sell property within two years of buying it, you did it to make a profit. This means that you are presumed not to hold it on capital account. Instead you hold it in the nature of trading stock and therefore any profit is fully taxable. There will be only narrow grounds for rebuttal.

Non-resident buyers must have a New Zealand bank account and Inland Revenue tax identification number. They also must disclose their tax identification number from their home country.

Exceptions to the bright line test are:

The property is the seller’s main home
The property is the seller’s main home
The property was inherited from a deceased estate or
The acquisition was pursuant to a relationship property settlement
The New Zealand Government will investigate introducing a withholding tax for non residents selling residential property from mid 2016.

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