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Final property tax proposed

New tax bill will impact on Kiwi property owners living overseas.

Tuesday, November 17th 2015, 11:00AM

by Miriam Bell

The Government introduced a Bill containing a proposed residential land withholding tax (RLWT) into Parliament this week.

It will affect people who live overseas and go on to sell the property within two years of purchase.

The RLWT is part of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Bill and will act as a collection mechanism for the new bright-line test.

Revenue Minister Todd McClay said the proposed RLWT will ensure the integrity of the tax system.

“It will bring the collection of bright-line tax into line with other withholding taxes, which generally apply when there is likely to be a tax liability and collection may be difficult.”

The RLWT will apply when:
• The property being sold is located in New Zealand and defined as “residential land” under the bright-line test provisions;
• The seller acquired the property on or after 1 October 2015 and has owned the property for less than two years before selling it;
• The seller is an “offshore person”.

An “offshore person” is defined as someone who is not a New Zealand citizen, does not hold a residence class visas, or is a New Zealand citizen or residence class visa holder who has lived overseas for some time.

In the case of New Zealand citizens, the relevant time period away is three years.

Further, New Zealand trusts and companies could also be considered “offshore persons” if they have significant offshore interests in them.

McClay said that, unlike the new bright-line test, there is no exception for the seller’s main home under the RLWT.

“As the withholding tax would only apply to a person living overseas, it is unlikely that the New Zealand property being sold would be the person’s main home.”

However, the RLWT does have exceptions for transfers upon death, and for transfers made in relation to a property relationship agreement.

The RLWT, along with the new bright-line test and other residential property tax changes will help ensure that everyone pays their fair share of tax on gains from property sales, McClay said.

The Bill completes the suite of investment property tax reforms announced by the Government in this year’s Budget.

Consultation on the Government’s tax reforms has already taken place and the Bill is set to come into force on July 1, 2016.

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Lender Flt 1yr 2yr 3yr
AIA - Back My Build 6.19 - - -
AIA - Go Home Loans 8.74 7.24 6.79 6.65
ANZ 8.64 7.84 7.39 7.25
ANZ Blueprint to Build 7.39 - - -
ANZ Good Energy - - - 1.00
ANZ Special - 7.24 6.79 6.65
ASB Bank 8.64 7.24 6.79 6.65
ASB Better Homes Top Up - - - 1.00
Avanti Finance 9.15 - - -
Basecorp Finance 9.60 - - -
Bluestone 9.24 - - -
Lender Flt 1yr 2yr 3yr
BNZ - Classic - 7.24 6.79 6.65
BNZ - Green Home Loan top-ups - - - 1.00
BNZ - Mortgage One 8.69 - - -
BNZ - Rapid Repay 8.69 - - -
BNZ - Std, FlyBuys 8.69 7.84 7.39 7.25
BNZ - TotalMoney 8.69 - - -
CFML Loans 9.45 - - -
China Construction Bank - 7.09 6.75 6.49
China Construction Bank Special - - - -
Co-operative Bank - First Home Special - 7.04 - -
Co-operative Bank - Owner Occ 8.40 7.24 6.79 6.65
Lender Flt 1yr 2yr 3yr
Co-operative Bank - Standard 8.40 7.74 7.29 7.15
Credit Union Auckland 7.70 - - -
First Credit Union Special - 7.45 7.35 -
First Credit Union Standard 8.50 7.99 7.85 -
Heartland Bank - Online 7.99 6.69 6.45 6.19
Heartland Bank - Reverse Mortgage - - - -
Heretaunga Building Society 8.90 7.60 7.40 -
HSBC Premier 8.59 - - -
HSBC Premier LVR > 80% - - - -
HSBC Special - - - -
ICBC 7.85 7.05 6.75 6.59
Lender Flt 1yr 2yr 3yr
Kainga Ora 8.64 7.79 7.39 7.25
Kainga Ora - First Home Buyer Special - - - -
Kiwibank 8.50 8.25 7.79 7.55
Kiwibank - Offset 8.50 - - -
Kiwibank Special - 7.25 6.79 6.65
Liberty 8.59 8.69 8.79 8.94
Nelson Building Society 9.00 7.75 7.35 -
Pepper Money Advantage 10.49 - - -
Pepper Money Easy 8.69 - - -
Pepper Money Essential 8.29 - - -
Resimac - LVR < 80% 8.84 ▼8.09 ▼7.59 ▼7.29
Lender Flt 1yr 2yr 3yr
Resimac - LVR < 90% 9.84 ▼9.09 ▼8.59 ▼8.29
Resimac - Specialist Clear (Alt Doc) - - 8.99 -
Resimac - Specialist Clear (Full Doc) - - 9.49 -
SBS Bank 8.74 7.84 7.45 7.25
SBS Bank Special - 7.24 6.85 6.65
SBS Construction lending for FHB - - - -
SBS FirstHome Combo 6.19 6.74 - -
SBS FirstHome Combo - - - -
SBS Unwind reverse equity 9.95 - - -
Select Home Loans 9.24 - - -
TSB Bank 9.44 8.04 7.55 7.45
Lender Flt 1yr 2yr 3yr
TSB Special 8.64 7.24 6.75 6.65
Unity 8.64 6.99 6.79 -
Unity First Home Buyer special - - 6.45 -
Wairarapa Building Society 8.60 6.95 6.85 -
Westpac 8.64 7.89 7.49 7.25
Westpac Choices Everyday 8.74 - - -
Westpac Offset 8.64 - - -
Westpac Special - 7.29 6.89 6.65
Median 8.64 7.29 7.32 6.65

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