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Income Tax Act 2007

General collection rules - Residential land withholding tax

RL 3: Associated persons: who must pay, and how?

You could also call this:

“How buyers pay tax when buying property from someone they're connected to”

If you and the person you’re buying from or selling to are associated persons, the rules about who pays the Residential Land Withholding Tax (RLWT) are different. In this case, the seller doesn’t have to pay the RLWT. Instead, you, as the buyer, must hold back the amount of RLWT from the payment to the seller. The amount you need to withhold is set out in section RL 4. This is different from the usual rule in section RL 2, where the seller would normally be responsible for paying the RLWT.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6890110.

Topics:
Money and consumer rights > Taxes
Housing and property > Buying and selling homes
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“Calculating the amount of Residential Land Withholding Tax to pay when buying residential land”

Part R General collection rules
Residential land withholding tax

RL 3Associated persons: who must pay, and how?

  1. Despite section RL 2, if the vendor and purchaser are associated persons—

  2. the vendor is not liable to pay the amount of RLWT provided in section RL 4; and
    1. the purchaser must withhold the amount of RLWT provided in section RL 4.

      Notes
      • Section RL 3: inserted, on , by section 49 of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).