Request Appointment Request Appointment
Engagement Terms Engagement Terms
Search Search
Contact Us Contact Us
You are here: Home > Blog

Kinghans Blog

Riz receives CPA Qualification


Law updates for landlords and tenants

New rules now apply for when tenants are liable for property damage, requirements for insurance statements, and more.

When: From 27 August 2019.

What: Updates to the Residential Tenancies Amendment Act.

Changes include the following:

  • Tenant liability for damage: If tenants (or their guests) damage a rental property because of careless behaviour, the tenant will be liable for the cost of the damage. This can be up to a maximum of four weeks' rent or the landlord's insurance excess, whichever is lower.
  • Insurance statement: Landlords must provide a statement in any new tenancy agreement about whether the property is insured and if so, what the excess amount is for any relevant insurance policies. The statement must also note that a copy of the policy is available to the tenant on request.
  • Contamination of premises: Landlords can now test for methamphetamine in rental properties while tenants are living there. They must provide at least 48 hours' notice (but not more than 14 days' notice) to tenants before entering the property. For boarding house tenants, they must provide at least 24 hours' notice before entering the boarding house room.  More details are coming about acceptable levels of methamphetamine contamination, as well as processes for testing and decontamination of rental properties.
  • Unlawful residential premises: This change strengthens the law for holding landlords to account if they rent out unsuitable premises. Landlords must meet all legal requirements relating to buildings, health, and safety that apply to the premises. They must also ensure that their property can legally be lived in at the start of the tenancy.

Tenancy Services has more information about the law changes, including a brochure that outlines the updates.

Residential Tenancies Amendment Act 2019 now in force (external link) - Tenancy Services  https://www.tenancy.govt.nz/about-tenancy-services/news/rta2-passed/

Residential Tenancies Amendment Act 2019 brochure [PDF, 527KB] (external link) - Tenancy Services https://www.tenancy.govt.nz/assets/Uploads/files/residential-tenancies-amendment-act-2019-brochure.pdf

Who: Rental property owners, landlords, managers and tenants.

Why: The Act was created to address the following issues:

  • liability for damage to rental properties caused by a tenant
  • methamphetamine contamination in rental properties
  • rental premises that are unlawful for residential use, such as garages and sleep-outs.

What you need to do:

You must provide a statement in any new tenancy agreement informing your tenants about whether the property is insured. You must also state that a copy of each insurance policy that relates to the tenant's liability for property damage is available on request. This ensures tenants are aware of anything the policy doesn't cover or anything they might do that would make that policy invalid.

Required statements for tenancy agreements (external link) - Tenancy Services- https://www.tenancy.govt.nz/starting-a-tenancy/tenancy-agreements/required-statements-for-tenancy-agreements/

Make sure your tenants are living in properties that meet the minimum requirements for renting.

Maintenance and inspections (external link) - Tenancy Service https://www.tenancy.govt.nz/maintenance-and-inspections/

These updates are in addition to the healthy homes standards. These new minimum standards for rental properties will improve heating, insulation, ventilation and drainage, stop draughts and reduce moisture entering the premise from outside.

About the healthy homes standards (external link) - Tenancy Services https://www.tenancy.govt.nz/healthy-homes/about-the-healthy-homes-standards/

Most tradies are doing the right thing, but IRD are looking hard at tax crime in the construction industry.

Whether it's you or us your accountant that prepares your GST and income tax returns, make sure all your income is declared. If you don't declare cash jobs, you can be hit with tax penalties and a criminal conviction that could affect your ability to contract for work. It could even lead to prison.

It's okay to do jobs for cash, as long as you record them and declare the income. Get it right by:

  • charging GST (if you're registered for it)
  • recording every job
  • registering your employees (if you have any), and
  • declaring every dollar.
If you've left some income off your previous returns, it's best to let us know now rather than wait for us to find out another way – We can help you get back on track.

Don't think cash jobs really do leave a trail?  Message from Inland Revenue


Overseas Held Bank Accounts

Globalisation has made it easier for people to invest money outside their tax residence jurisdiction. This has provided opportunities for offshore tax evasion.  New Zealand is one of many jurisdictions that has committed to a global initiative led by the Organisation for Economic Co-operation and Development (OECD) on the automatic exchange of financial account information using the CRS.  

 

This information is required by law to be collected by financial institutions around the world for reporting to tax authorities. Tax authorities will exchange this information to ensure everyone pays the right amount of tax. Tax pays for services we all need and to improve the communities we live in.

Just a reminder that IRD receives automatic exchange from offshore jurisdictions  of financial bank accounts held off shore. Inland Revenue commenced this automatic exchange September 2018 and continues to receive financial account information on New Zealand Tax residents and will will do so each year going forward. 

The CRS is a global framework for the collection, reporting, and exchange of financial account information about people and entities investing outside of their tax residence jurisdiction.

The CRS and a comprehensive commentary along with other information about AEOI are available on the OECD's automatic exchange portal. The CRS and the related commentary have been introduced into New Zealand law.

The CRS applies from 1 July 2017 to financial institutions, account holders and certain other people who control accounts.

What this means for account holders and certain controlling persons

If you hold an account with a financial institution (or if you hold an account for the benefit of another person) you may be asked to provide documentation and other information to assist that institution to carry out their due diligence and reporting obligations. This is required so that the financial institution can determine whether you are a foreign tax resident (or the person that you hold the account for is a foreign tax resident).

It is important that you provide accurate information when requested and update the information if there is any material change within a reasonable timeframe. This includes taking reasonable efforts to obtain and provide information about any persons that you hold an account for.

Penalties may apply if you provide false or misleading information, fail to provide this information, or fail to provide an update if there is any material change to the information you have provided. S

Tax reporting

 

You need to ensure that you keep us advised about your foreign bank accounts so that we can report any required tax requirements and income from these accounts.  

 

IRD Convictions 2007-2016

IRD Convictions
Number of people convicted 2007 to 2016

The information represents the number of people convicted under the Tax Administration Act 1994 in each calendar year. A person may have more than one prosecution in each year.

The information is supplied by the Ministry of Justice and may differ marginally from other analyses due to timing and differences in counting cases involving:

  • multiple defendants
  • multiple offences
  • alternative charges, and
  • representative charges.

However the numbers are broadly representative of Inland Revenue's conviction activity.
Graph of number of people convicted (excluding failure to furnish returns)

Large version of graph

+-Long description of graph

This graph has three lines plotting for the period 2007 to 2016, the number of people convicted for following types of offences:

  • evasion
  • employer-related, and
  • other.

Over the decade in question the number of people convicted for:

  • evasion offences has reduced significantly from 91 in 2007 to 55 in 2016
  • employer-related offences have tended to remain fairly stable, although between 2015 and 2016 that number tripled from 12 to 36
  • other offences decreased significantly between 2007 and 2016, falling from 43 to 3.

 

Graph of total number of people convicted (failure to furnish returns and total number of people convicted)


Large version of graph

+-Long description of graph

This graph has two lines plotting the total number of people convicted under the Tax Administration Act 1994 versus the number convicted solely for failing to furnish a return or provide information for the period 2007 to 2016.

From 2007 to 2016 the number of people convicted for failing to furnish returns or to provide the required information (down 96%) has fallen in line with the total (down 85%)

IRD- Tax Evasion Action Taken