Putting your tax affairs right
Making a voluntary disclosure
If you think you should have paid tax on the sale of your property but didn't include them in your return, you should consider making a voluntary disclosure. If you think you need to make a voluntary disclosure we recommend you talk to a tax advisor first. You can find more information in our booklet Putting your tax returns right (IR280) found under "forms and guides".
The benefits of making a voluntary disclosure
Penalties are significantly reduced if you come forward before we contact you. This applies to all disclosures not just those about property. You may be entitled to a full reduction in some shortfall penalties and a 75% reduction of other shortfall penalties that would be applied if we find out what's wrong with your tax returns in some other way.
If you voluntarily tell us about your mistake after we tell you that we will audit your tax affairs, but before the audit starts, any shortfall penalty will be reduced by 40%.
Shortfall penalties may be reduced further if you have a good history of complying with your tax obligations.
Find out more about shortfall penalties.
Penalties for not declaring your property profits
There are penalties for not declaring the profits you make from property sales. They range from 20% to 150% of the tax that should have been paid depending on the circumstances leading to any omission. However penalities can be reduced in full or significantly reduced if you voluntarily tell us about your mistake.
If you are unable to pay your tax
If you are unable to pay the full amount due on time, you should contact us as soon as possible. We will discuss your situation with you and help you determine the best way of dealing with the amount due. You can also read or download our booklet Debt options (IR582) found under "forms and guides".
Avoid paying penalties
You can avoid paying any penalties by complying with your tax obligations and declaring and paying tax on all your taxable sales. If you are unsure whether or not you should be paying tax on a property you have sold then please seek professional advice.
Date published: 25 May 2008
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