New Zealand’s property sector is under sharper scrutiny, with Inland Revenue uncovering $153.5 million in undeclared tax within the first three quarters of the financial year—just shy of last year’s full-year figure of $156.8 million.
Targeted Compliance Programme Delivers Measurable Outcomes
The $153.5 million in discrepancies stems from a compliance programme launched with Budget backing.
Inland Revenue has concentrated efforts on developers, landlords, and bright-line property holders, applying enforcement measures, education, and analytics to reveal evasion.
Developers Identified as Primary Source of Non-Compliance
Inland Revenue flagged $72.9 million in discrepancies from property developers in its “Defaulting Developers” project—a 48 per cent jump from last year. Officials noted the use of early GST refund claims without follow-through on sale declarations.
“Enforcement action was taken quickly when sales were not reported and developers failed to respond,” Inland Revenue said.
Frequent Land Transfers Linked to GST Avoidance
They identified $59.9 million in discrepancies from land transactions marked by repeated transfers or use changes. Many of these involved efforts to sidestep GST obligations via classification tactics or concealed ownership. The figure rose 39 per cent from the same time last year.
Bright-Line Education Campaign Generates Disclosures and Detections
The March education initiative targeting the bright-line property rule supported over 550 customers and generated $3.68 million in voluntary disclosures. Inland Revenue, however, also identified $14.2 million in non-compliance tied to the rule.
Digital Tools and Analytics Enhance Detection Capability
The compliance programme has benefited from Inland Revenue’s use of digital solutions. The tools support earlier detection and allow for more accurate targeting of non-compliant behaviour. Inland Revenue says it is “leveraging automated tools and analytics to detect non-compliance early.”
Conclusion
Discrepancy figures nearing last year’s total in just nine months suggest Inland Revenue’s approach is gaining traction. Automated tools and education initiatives are driving both early detection and voluntary disclosures. The continued scrutiny of the property sector is anticipated as the department closes out the financial year.