NZ: Statist theft nets $25m in property tax

Subject: NZ: Statist theft nets $25m in property tax Fri Feb 06, 2009 8:17 pm

A clampdown on property tax dodgers has netted an extra $25 million in unpaid taxes.

A 40-strong Inland Revenue investigation team identified $10 million in unpaid taxes for the first two quarters of this financial year, after a government directive to target tax evaders.

This comes on top of $15 million identified by the investigation team for the year ended June 2008.

While New Zealand does not have a capital gains tax, property sales are taxable if one of the intentions when buying a house or vacant land is to sell it for a profit.

Routine property tax audits netted a further $111 million in unpaid taxes in 2008 and $43 million so far this financial year.

More than 5027 property audits have been done and at least five prosecutions have taken place.

More than 230 property investors have come forward and made voluntary disclosures.

But Inland Revenue assurance manager Richard Philp said "a range of third parties" were also being used to help identify those buying and selling properties whose profits "may not have been returned as income".

Real estate agents are understood to have been asked to hand over sales transactions in some instances.

The figures follow renewed calls for a capital gains tax, as an international housing affordability survey put New Zealand just behind Australia as the least affordable country in which to buy a home.

Some business lobbyists and community housing groups called for the tax, saying too many investors were using property to make money because it was "tax free", pushing house prices sky high.

Manufacturers and Exporters Association chief executive John Walley said: "It is clear that the tax rules favour [property] assets over activity."

But Housing Minister Phil Heatley and Revenue Minister Peter Dunne both ruled out a capital gains tax, saying it was flawed and would hit small investors hardest.

Mr Dunne said existing property tax laws were sufficient "so long as they are applied as vigorously as the [Inland Revenue] commissioner is following the law at the moment.

"I'm certainly not in favour of penalising the domestic property owner or the person who has a holiday bach that they let out to people from time to time."

http://www.stuff.co.nz/4840121a11.html

NZ: Statist theft nets $25m in property tax

NZ: Statist theft nets $25m in property tax

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