RL 2Vendors: who must pay, and how?

1. The vendor is liable to pay the amount of RLWT provided in section RL 4.

2. The vendor’s conveyancer, or if the vendor does not have a conveyancer, the purchaser’s conveyancer, is treated as the agent (the paying agent) of the vendor in relation to the RLWT, and, in relation to the RLWT, must provide returns and satisfy the vendor’s liability.

3. The paying agent is not treated as the vendor’s agent for income, or for a tax obligation other than RLWT, solely because of their agency in relation to RLWT.

4. Sections HD 2, HD 3, and HD 4 (which relate to agents) do not apply to a paying agent that is agent only in relation to RLWT.

5. The paying agent, as agent in relation to the RLWT, is not jointly and severally liable in relation to the vendor’s RLWT or in relation to a debt under section RA 10 (When obligations not met). The vendor alone is liable to pay the RLWT, despite the paying agent’s obligation to satisfy the vendor’s liability.

6. Despite subsection (5), if the paying agent fails to satisfy the vendor’s liability, then,—

7. for the purposes of Part 9 of the Tax Administration Act 1994, the paying agent is treated as failing to pay an amount of withholding tax equal to the amount of RLWT liability they failed to satisfy, if the paying agent has subtracted or retained an amount from a residential land purchase amount; or
8. for the purposes of Part 9 of the Tax Administration Act 1994 other than section 139B, the paying agent is treated as failing to pay an amount of withholding tax equal to the amount of RLWT liability they failed to satisfy, if the paying agent has not subtracted or retained an amount from a residential land purchase amount.

9. A paying agent is not liable for a penalty under Part 9 of the Tax Administration Act 1994 for a failure described in subsection (6)(b) if, for that failure,—

10. the paying agent has relied on a form and accompanying documents given to them in accordance with section 54C of the Tax Administration Act 1994; and
11. the paying agent’s reliance on the form and accompanying documents is reasonable.

12. An amount subtracted or retained from a residential land purchase amount by a paying agent to satisfy the vendor’s RLWT liability—

13. is treated as received—
    1. by the vendor; and
    2. at the time the residential land purchase amount is paid to them; and
14. is treated for the purposes of this Act as derived by the vendor at the same time and in the same way as they derive the residential land purchase amount.

Notes

• Section RL 2: inserted, on 1 July 2016, by section 49 of the Taxation (Residential Land Withholding Tax, GST on Online Services, and Student Loans) Act 2016 (2016 No 21).
• Section RL 2(6)(a): amended, (with effect on 1 July 2016), on 21 February 2017, by section 96(a) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
• Section RL 2(6)(b): amended, (with effect on 1 July 2016), on 21 February 2017, by section 96(b) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).
• Section RL 2(8): amended, (with effect on 1 July 2016), on 21 February 2017, by section 96(c) of the Taxation (Business Tax, Exchange of Information, and Remedial Matters) Act 2017 (2017 No 3).