IRD: Increasing attention for property deals
Inland Revenue will not say which suburbs it is most closely monitoring for property transactions that should be taxed but says it is paying more attention to what vendors are doing.
Thursday, May 29th 2014, 12:00AM
by The Landlord
Revenue Minister Todd McClay told the Finance and Expenditure Committee this week that the department had proved quite efficient at getting a return for the taxpayer when it came to property tax compliance.
He said, in the first year of increased monitoring, the IRD had found $53 million in tax discrepancies on property transactions.
"We started an initiative in 2010 where additional resources were given to Inland Revenue to look at property compliance and the returns have been initially higher than [$8.40 for every $1 spent] and have levelled out at that level."
He said the IRD would look at areas of the market where there were movements and fluctuations and would study sales and audit transactions.
An IRD spokeswoman said the department monitored all areas of New Zealand. “Assessing income tax on property transactions I part of IRD’s business-as-usual activity.”
She said people who made income from their property transactions were obliged to pay tax on that, as were people who entered into transactions with the intention of resale.
“Speculation and trading is more prevalent in some suburbs and IRD works to identify those hotspots of activity across the country. IRD will not comment as to which specific suburbs are monitored more closely than others. Inland Revenue is aware that property transactions are a growing risk and we are paying more attention to this area in all locations throughout New Zealand.”
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