Property investors in IRD sights

  • 21/01/2010

About 300 property investors are in Inland Revenue's sites for allegedly dodging taxes.

IRD earlier identified 2000 as failing to pay $214 million in property tax over the past four years, The Dominion-Post reported.

Inland Revenue assurance group manager Martin Scott said the 300 cases involved investors who each turned over 20 or more properties during that period.

"We are looking at a number of potential prosecutions, including a case where nearly 60 properties were sold and income and profit of about $8 million was not disclosed."

He did not say what portion of the $214m in unpaid tax the 300 could be liable for, but the revenue owing on $8m could be as high as $3m.

New Zealand does not have a capital gains tax for family homes, but tax must be paid by people in the business of buying other property to sell for profit. Frequent purchases and sales over a short period is a key indicator of a motive of profit.

The other 1700 investors under investigation bought and sold at least six properties each during the past four years.

The targeting comes as the Government considers a revamp of the tax system including a recommendation to introduce new taxes on investment properties.

Investigators were also focussing on 9700 households receiving Working for Families tax credits and using losses on rental properties they owned to boost the amount they get from taxpayers by a collective $13 million a year.

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source: newshub archive

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