Sam and Wendy sign up to purchase a new home on 2 October 2015. They agree to a quick settlement in 2 weeks time. They nominate their family trust to complete the purchase. When Sam and Wendy contact their solicitor, they are advised that they will need to urgently apply to the IRD for an IRD number for their family trust so that the tax statement can be completed for settlement. The IRD has been inundated with applications for new IRD numbers, and the IRD number does not come through in time for settlement. Sam and Wendy are not able to settle on the settlement date and have to pay their vendor default interest until the IRD number finally comes through a week later.
New residential land tax rules came into effect on 1 October 2015. For more information on these tax rules click here.
If you have any concerns about buying or selling residential property, please contact us for good legal advice that will give you peace of mind.