Property investors in IRD sights
Fri, 22 Jan 2010 8:51a.m.
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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22/01/2010 6:59:42 p.m.
Then you need to look at the trusts which are set up for tax avoidance or is that too close to our MPs who appear to be heavily into this activity.....don't you just love accountability!
22/01/2010 12:52:24 p.m.
Warren Matthews wrote:
We need more of this and less changes to the tax system that seem to do nothing but disadvantage the disadvantaged. This will be the tip of the ice-berg, the lure of an over 30% increased profit (tax avoidence) is just too much for some.Regarding the difference between tax avoidence and tax evasion, can tax that has been avoided be reclaimed? Or is it just a failure of the law that has allowed avoidence to slip through and its well done to those who can use the loopholes?On that, is all the tax reform talk going to be more talk where loopholes are diliberately introduced so the tax avoidence crowd can continue to avoid?
22/01/2010 10:20:37 a.m.
Stop penalizing common man and get after these chaps. The tax base can garner good revenue from these owings.
22/01/2010 10:19:40 a.m.
paul andersen wrote:
sounds like a clear case of defrauding the taxpayer here. the media makes a big deal out of some beneficiaries ripping the system off for a grand a week. this runs into many millions. name them and shame them!!!
22/01/2010 10:01:43 a.m.
About time - **Queue sob story from middle class worker with rental properties about how hard they work and how much they hate doll bludgers**
"But where else do I invest money"..try the share market...Yes we most people got burnt in the 80s but good returns are being made -
Plenty of people have got burnt on the property market....and there's not tax on profit for shares....
Do some research first...make sensible decisions with spare money...and stop whining that property is the "only way"
22/01/2010 9:17:28 a.m.
Hahahahaha, some sleepless nights coming for some..
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