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Residential Land Withholding Tax - What is it and does it apply to you?

Property
Gibson Sheat
Published on
Residential Land Withholding Tax (“RLWT”) is a tax deducted from proceeds of the sale of residential property, if the following applies:

  1. The property being sold is residential land in NZ.

  2. The sale amount is payable or paid after 1 July 2016.

  3. The seller:

    1. Bought the property on or after 1 October 2015 through to 28 March 2018 inclusive and owned it for less than two years before selling; or

    2. Bought the property on or after 29 March 2018 inclusive and owned it for less than five years before selling; and

    3. Is an offshore RLWT person.

Any person or entity who falls within either 3(a) or (b) above will need to complete a RLWT declaration to identify whether 3(c) applies and RLWT needs to be deducted. If payable, the RLWT would be withheld by their conveyancer and paid to Inland Revenue.

RLWT does not apply to inherited properties, relationship property settlements or those who hold a certificate of exemption.