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When you're an offshore RLWT person selling a residential property located in New Zealand, RLWT is deducted when:

  • a purchase amount is paid or payable (excluding deposits or part payments that total less than 50% of the sale amount)
  • the property sold is in New Zealand and is residential land
  • the bright-line test applies because you sold the property within the bright-line period.

Bright-line period

For property sold on or after 1 July 2024, the bright-line test looks at whether your bright-line end date for the property is within 2 years of your bright-line start date.

For property sold before 1 July 2024, it will come under the bright-line test if you acquired it on or after 29 March 2018 and it is sold within 5 years.

The bright-line test

Your conveyancer deducts RLWT

Your conveyancer, such as your lawyer or law firm you use to process the sale, is your withholder and deducts RLWT for you.

If you do not have a conveyancer, then the purchaser's conveyancer deducts RLWT for you.

If the purchaser does not have a conveyancer, then the purchaser must withhold the RLWT for you. Before they can, you'll need to give them:

  • a Residential land withholding tax declaration form - IR1101 
  • supporting documents as stated on the form.

You need to complete an IR1101 even if your withholder will not need to deduct RLWT. If you do not give them an IR1101 or the supporting documents, you may be committing an offence under the Tax Administration Act 1994. 

When RLWT is not deducted

The withholder will not need to deduct RLWT from offshore RLWT persons in the following situations.

  • A sale or disposal of an inherited property or relationship property settlement.
  • The property transfer is from a deceased person to the executor or administrator of the estate.
  • The property transfer is by an estate on the death of a person.
  • The seller is a beneficiary of an estate selling/disposing of an inherited property.
  • The seller holds a valid certificate of exemption.

Joint ownership and RLWT

RLWT is deducted differently for a jointly owned property. An offshore RLWT person will only have RLWT deducted from their share of the property sale profit. 

Your withholder can use our RLWT calculator to work out how much to deduct.

5 minutes
Residential land withholding tax (RLWT) calculator

This tool will help a withholder work out the RLWT to deduct and pay to us.

Go to this tool

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Last updated: 20 Jun 2024
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