We receive details of property sale from Land Information New Zealand (LINZ) every week from the tax statements completed by buyers and sellers of property. This enables us to assess tax obligations with regards to the sale of property, including under the bright-line rules. If you're one of these customers, we contact you shortly after the sale to explain how the income tax rules may apply to your property, and provide guidance on how to plan for it. We also supply a link to a guide to work out what tax you need to pay, removing the uncertainty of guess work.
Once income tax returns are due, the LINZ data helps us identify and follow up with people who have not declared income from their property sales. We contact these customers to guide them on declaring the right amounts and help them through the process of correcting their returns. Depending in the situation we may perform an audit, or in extreme cases, prosecute for tax avoidance.
Soon we’ll be using the LINZ data to identify customers who have bought their first investment property. If you're one of these customers we'll let you know your tax obligations and how the bright-line rule may apply to any future sale at the start of your journey.