Property crackdown boosted by more IRD numbers
Flood of new IRD numbers will be making the work of the IRD’s property compliance unit easier, one tax specialist says.
Tuesday, February 23rd 2016, 12:00AM
by Miriam Bell
Since 1 October 2015, everyone who is buying and selling property has had to provide a New Zealand IRD number.
One of the goals of this measure was to generate better numbers on how many non-residents are buying property in New Zealand.
This followed controversy over claims about the level of Chinese investor activity in the Auckland market.
Now, recently released IRD data shows that, since 1 October 2015, a total of 94,265 new IRD numbers have been issued.
This is higher than the number issued in the same period in previous years.
Of the new IRD numbers issued, 67,211 went to individuals and 27,054 went to non-individuals (which includes companies and Trusts).
Of the individual numbers issued, 34,177 went to New Zealand residents and 33,034 went to non-residents.
Of the non-individual numbers issued, 26,830 went to entities resident in New Zealand – and just 224 went to entities based offshore.
The IRD numbers issued include young people starting work, migrants and new businesses, as well as property buying or selling property.
Tax specialist Terry Baucher told landlords.co.nz the number of individual IRD numbers issued to non-residents seemed quite high.
“Looking at the comparison with New Zealand residents, it’s almost one for one. That could indicate the policy is having some effect and shaking the trees out a bit.”
He said that would be encouraging to the IRD’s Property Compliance Programme (PCP).
In his view, the measure would give a handle on better reporting and would help the PCP in their work.
“This measure essentially tells people in advance what sort of information they have to provide. But the IRD has been getting that information unofficially anyway.”
As an example, he cited a new Privacy Commissioner report, which showed the IRD was the government agency that made the most requests for personal information from 10 New Zealand companies last year.
In a trial from August to October 2015, the companies received 11,799 requests for their customers’ information.
The IRD made 4,670 requests, which was significantly more than the second ranked government agency, the police.
Baucher said the PCP is very thorough and that people underestimated them at their peril.
“They have enormous powers and they are getting much better at data searching.”
He added that the requirement for an IRD number when buying or selling property could also have some unintended consequences.
For example, lots of family trusts established in the past wouldn’t have IRD numbers but now they would have to.
« Stepping into development | Free Investment Property Showcase Events: Auckland, Wellington and Christchurch » |
Special Offers
Comments from our readers
No comments yet
Sign In to add your comment
Printable version | Email to a friend |