Taranaki Property Investors' Association
The Inland Revenue Department's focus on the property market has not let up due to the recession.
The department's latest annual Compliance Focus publication, released today, shows, if anything, an increased focus on getting more tax out of the property investment sector.
The release also shows the department got an extra $83 million in tax in the last year out of its stepped up property compliance programme.
Just over $6.6 million of this came from voluntary disclosures but the rest - $77.1 million - came from audits.
The Compliance Focus shows an increased focus on property - whether the taxpayer is an individual, a small business, a corporate, or a "high wealth and high income individual".
"An involvement in property development is one of the risk assessment criteria we use when selecting high wealth individuals for review," the document says.
And small to medium sized businesses (SMEs) with property holdings are also a target.
This is partly through loss attributing qualifying companies (LAQCs) and the department says that after the combination of recently announced changes in this year's Budget, plus a stepped-up activism from the department, the number of new LAQCs has dropped and there has been a significant increase in the number of LAQCs being deregistered.
However, many of the deregistered LAQCs have not lodged tax corrections and the department is following this up.
But on top of the LAQC issue, there has been a rise in the number of shareholders which have recently established trusts and partnerships as an alternative structure for their property holdings.
"They continue to claim private expenses and avoid their tax. We're investigating these cases."
Source: Landlords.co.nzcomments powered by Disqus