IRD cracks down on property investment schemes

An audit blitz on property developers and speculators in central Otago had been so successful in a short space of time that Inland Revenue investigations into property speculation were now running full time throughout the rest of New Zealand, he said.

"The rest of the country has followed our lead," he said.

Four audit teams had carried out comprehensive audits of property transactions in Central Otago, resulting in Inland Revenue uncovering $5.5 million in discrepancies in property speculation in Queenstown, Wanaka and Te Anau since March last year, Consedine said.

The $5.5 million was until December and was money that had been "agreed and assessed" by the department, he said.

Property investment discrepancies now ran a very close second to tax avoidance as the No 1 tax dodge, he said.

"Anything to do with property now has become big-time investment in New Zealand."

From July 2003 to June 2004 $62.4 million had been racked up in property tax discrepancies, he said.

"And $20 million, nearly a third of that, was in the South Island. So our focus is very much on property transactions.

"We're not worried about the long-time family investment in cribs and holiday homes though."

Ten investigators and auditors were staying in the south indefinitely, he said.

"We're far from leaving the area -- we have extra staff being brought on in some areas."

"People would be well advised to ensure they are paying the right tax in all investments especially property," he said.

Read More - Opens in a new window