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Owners of real estate in New Zealand, who are non-resident there are liable to pay taxes and must file an annual income tax return. In order to avoid being taxed at a higher rate, individuals should apply for a New Zealand Tax Number, called IRD number.
Non-residents are taxed only on the income derived in New Zealand, whereas residents pay taxes on their worldwide income.
New Zealand Income Taxes
The income tax treatment depends on residency status. Income tax varies dependent on income levels in any specific tax year. For 2011/2012 tax year the tax rates vary from 10.5 to 45 per cent of the taxable income.
New Zealand Tax Identification Number
The Inland Revenue Department (IRD) number is required for all individual and non-individual taxpayers in order to comply with their obligations with the Inland Revenue Department. You will need IRD number to file tax returns, using the department’s online services, etc.
Purchase of New Zealand property
Generally, there are no restrictions on people from foreign countries purchasing property in New Zealand. However, official clearance is needed if you intend to buy property valued over NZD 10 million or if you intend to acquire sensitive area (for example, agricultural land) exceeding 5 hectares. Authorization is also needed for the acquisition of islands, or land containing or adjoining reserves or heritage areas, and foreshores or lakes in excess of 0.4 hectares.
New Zealand Real Estate Taxes / New Zealand Property Taxes
There is no Real Estate tax in New Zealand. Local general rates are imposed by the local authorities to finance a variety of infrastructure and services vital for the quality of life expected in New Zealand.
Letting Property in New Zealand
Rents in New Zealand are expected to vary near the market rent. The landlord’s main responsibilities are:
- to provide clean and safety property to the tenant;
- to require maximum 4 weeks rent as a bond and maximum 2 weeks rent in advance.
If the landlord is out of New Zealand for more than 21 days, a New Zealand based agent/representative should be appointed to keep contact with the tenant. By filing income tax return, the landlord generally deducts rental property expenses from his/her rental income to reach the taxable amount.
New Zealand Capital Gains Tax
New Zealand do not impose Capital Gains tax. However, there are special regimes if you tender to sell and buy properties for profit. Usually these gains are affected by the income tax and GST (Goods and Services Tax) regimes.
New Zealand Estate and gift taxation
There are no estate and inheritance levies on properties in New Zealand. Gift tax applies on taxable gifts valued over NZD 27000 during the financial year. However, if a gift with total value of over NZD 12000 is made, during any 12-month period, a Gift Statement should be completed and filed with the Inland Revenue Department.
New Zealand Tax Return & New Zealand Tax Filing Deadline
The financial tax year in New Zealand is from 1st April to 31st March. You need to file your tax return by 7th July unless you have a tax agent or an extension of time to file.
Worldwide income
If resident in the UK or Ireland you will have to declare any income received in New Zealand in your annual income tax return. There is a double taxation agreement between New Zealand, Ireland and the UK so double taxation relief applies in some cases. Please contact us for further details regarding double taxation relief and/or filing your Income Tax Return.
Property Tax International can organize the completion and filing of all necessary tax returns in addition to advising on your property tax obligations in your home country.
The information provided here is intended as a guide only. While Property Tax International Limited makes every effort to ensure that the information contained herein is accurate, we take no responsibility or liability for any inaccurate, delayed or incomplete information, nor for any actions taken in reliance thereon.
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