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Goods and Services Tax Act 1985

General provisions

78F: Liability in relation to supplies of land

You could also call this:

"Telling the seller about tax when buying land"

Illustration for Goods and Services Tax Act 1985

When you buy land, you need to tell the seller some information. You must tell them if you are a registered person for tax purposes, or if you plan to be. You also need to say if you are buying the land to use for business, and if you do not plan to live there. You can find out what it means to be associated with someone under section 2A(1)(c). If you are a registered person, you must give the seller your registration number when you settle the sale.

The seller can use the information you give them to work out the tax on the sale. If someone is buying the land for you, they need to give the seller the same information. If the buyer is acting for someone else, they must tell the seller if that person is a registered person, if they plan to use the land for business, and if they do not plan to live there.

When a contract is made for a supply of land, the person who made the contract can nominate someone else to receive the supply. In this case, either the person who made the contract or the person who will receive the supply must give the required information to the seller. If you are acting for someone else when you buy land, you must tell the seller if the person you are acting for is a registered person, if they plan to use the land for business, and if they do not plan to live there. You must also give the seller your registration number, or your tax file number if you do not have a registration number.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM3645186.

Topics:
Money and consumer rights > TaxesHousing and property > Buying and selling homesHousing and property > Land use
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78E: Alteration of agreed price in relation to supply mistakenly believed to be of a going concern, or

"Changing the price if a business sale is not a going concern as thought"

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78G: Railways vesting: zero-rating and timing of tax calculations and documents, or

"Railways and how tax is calculated for them, including when tax is not charged"

Part 11General provisions

78FLiability in relation to supplies of land

  1. This section applies in relation to a supply that wholly or partly consists of land.

  2. At or before settlement of the transaction relating to the supply, the recipient is required to notify the supplier as to whether, at the date of settlement,—

  3. they are, or expect to be, a registered person; and
    1. they are acquiring the goods with the intention of using them for making taxable supplies; and
      1. they do not intend to use the land as a principal place of residence for them or a person associated with them under section 2A(1)(c).

        1. For the purposes of subsection (2)(a), a recipient who is a registered person, or who expects to be a registered person, must provide their registration number to the supplier at or before the date of settlement.

        2. The supplier may rely on the information provided as required by subsection (2) in determining the tax treatment of the supply.

        3. For the purposes of section 5(2), the notice referred to in subsection (2) must be provided to the second person referred to in section 5(2).

        4. For the purposes of section 60B and a contract for a supply that wholly or partly consists of land, when the person who enters the contract (person B) nominates another person (person C) to receive the supply, the requirements of subsection (2) are met if—

        5. person B provides the required information as it relates to their expectation of the circumstances of person C:
          1. person C provides the required information.

            1. When a supply is made to a person who is, for the purposes of the supply, an agent acting on behalf of an undisclosed principal, the requirements of subsection (2) are met if the agent notifies the supplier as to whether, at the date of settlement, the principal as recipient—

            2. is, or expects to be, a registered person; and
              1. is acquiring the goods or services with the intention of using them for making taxable supplies; and
                1. does not intend to use the land as a principal place of residence for them or a person associated with them under section 2A(1)(c).

                  1. When a supply is made to a person who is, for the purposes of the supply, an agent acting on behalf of an undisclosed principal, the agent must provide their registration number to the supplier at or before the date of settlement. If the agent does not have a registration number, their tax file number may be provided in its place. On meeting the requirements of this subsection, the person is treated as having met the requirements of subsection (2B).

                  Notes
                  • Section 78F: inserted, on (applying to supplies made on or after 1 April 2011), by section 24(1) of the Taxation (GST and Remedial Matters) Act 2010 (2010 No 130).
                  • Section 78F(2): amended, on , by section 206(1) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                  • Section 78F(2B): inserted, on , by section 244(1) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                  • Section 78F(3): amended (with effect on 1 April 2011), on , by section 226(1) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
                  • Section 78F(4): amended, on , by section 206(2) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                  • Section 78F(5): replaced (with effect on 1 April 2011), on , by section 226(2) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).
                  • Section 78F(6): added (with effect on 1 April 2011), on (applying to supplies made on or after 1 April 2011), by section 244(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                  • Section 78F(6): amended, on , by section 206(3) of the Taxation (Transformation: First Phase Simplification and Other Measures) Act 2016 (2016 No 27).
                  • Section 78F(7): added (with effect on 1 April 2011), on (applying to supplies made on or after 1 April 2011), by section 244(2) of the Taxation (Tax Administration and Remedial Matters) Act 2011 (2011 No 63).
                  • Section 78F(7): amended (with effect on 1 April 2011), on , by section 226(3) of the Taxation (Annual Rates, Returns Filing, and Remedial Matters) Act 2012 (2012 No 88).