PHOTO: The department is matching tax returns with property transactions. Photo credit: Getty.
The department is matching tax returns with property transactions and is contacting who might be affected and asking tax advisers to do the same.
KPMG tax partner Paul McPadden said the crackdown was no surprise in the current political, financial, and social clamour about the sector, and he expected more.
“I would certainly expect to see more action on this, there’ll be ongoing evaluation of the laws, policing from the IRD … quite reasonably you could see the rules change in the future.”
The bright-line test requires tax to be paid on the gains made if a property is sold within two years if bought between October 2015 and March 2018, or within five years if bought after the end of March 2018.
McPadden said the family home and inherited property were not subject to the tax, but a holiday house might be, as well as sales to family members or to a family trust.
He said IRD was clearly serious in what was a “direct, planned, and coordinated” campaign with all tax advisers being warned.
