Agency believes salespeople claiming high level of expenses relative to their income is widespread in the industry
The Inland Revenue has announced that it will be clamping down on real estate professionals who both under-report their income and overstate their expenses.
Richard Owen, a spokesperson for Inland Revenue, said that the agency’s analysis of the real estate sector suggests that salespeople and agents “commonly claim high level of expenses relative to their income.”
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“Inland Revenue believes the issue is widespread and we must act,” said Owen. “People are claiming private expenditure but not keeping logbooks or other business records to support the claim.”
Owen warned that if the agency is concerned that someone has overclaimed expenses, they will “receive a letter from us requesting they prove the expenses claimed.”
“Things like bank statements, invoices, a logbook and any other information to confirm the expense is deductible,” said Owen. “After all, tax pays for the essential things that make New Zealand a great place to live. If we all pay our fair share there’ll be more money to help with things like the health and education systems.”
According to Owen, the clamp down is part of the agency’s move towards “business transformation” and the modernisation of the tax revenue system.
“One of the intended benefits is making more intelligent use of the big data we are collecting so we can identify trends in a timely manner,” said Owen. “Our approach is to raise awareness and self-help materials first. We would far rather encourage customers to do the right thing from the start. In this respect we have several tools available to assist, including providing in house presentations.”
“So, we recommend people approach us before we contact them,” Owen concluded.
