Selling a property comes with more than an agent’s commission. There are taxes, transfer charges, and timing rules that can change what you take home at settlement. A clear estimate helps you avoid surprises and plan cash flow.
This guide breaks down the main levies and related costs that can affect New Zealand sellers. You’ll see how to check the bright-line test, what government fees to expect, and how to build a simple estimate you can update as details firm up.
Identify The Levies And Timing Rules That Matter
List costs that could reduce sale proceeds. Include timing-triggered taxes, compulsory government fees, and charges linked to your status or property type. Keep the list lean and update it as details firm.
Separate fixed amounts from variables. Filing fees are fixed, while agent commission and time change with price and complexity. If your situation is unusual, add a buffer.
Map each cost to dates. The settlement date drives prorated items, while the acquisition date matters for tax tests like the bright-line. Put them on a simple timeline, note assumptions, then review once the agreement and settlement are confirmed.
Check If The Bright-Line Test Applies
The bright-line test can create an income tax bill if you sell within a set period after you first acquired the property. You can speed up your estimate by running a quick bright-line rule calculation to check the timing and possible liability. If the timing is tight, treat the result as a placeholder until your accountant confirms details.
For properties sold on or after 1 July 2024, Inland Revenue notes the bright-line period is 2 years from your relevant start date. That shorter window still catches recent purchases, so check the exact acquisition date and any main home exclusions that might apply.
Document what you assumed about the start date and exemptions. If your status changes before settlement, the calculation may change. Keeping a dated note beside your estimate helps you or your adviser adjust later.
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Allow For RLWT If You’re An Offshore Seller
If you’re an offshore RLWT person, withholding tax may be deducted at settlement. Inland Revenue explains that Residential Land Withholding Tax is collected by a withholding agent and paid to IR, reducing your net proceeds. It’s a prepayment.
Confirm whether you meet the offshore definition before signing. If you do, ask your conveyancer to model the RLWT deduction using the sale price and cost base. Enter the estimate as a separate line in your net sheet.
If RLWT doesn’t apply, record who confirmed it and the date, plus the reason. It’s easy to miss and can materially change the settlement cash later.
Include Government And Land Transfer Fees
Every transfer attracts certain government charges. The Land Transfer Regulations set a filing fee for receiving, registering, noting, or depositing an instrument, currently $122. Minor compared with tax, but unavoidable, these charges belong in your estimate so you don’t understate net proceeds.
Ask your lawyer which instruments will be lodged for your sale. A freehold transfer is straightforward, but extra instruments can arise with easements, variations, or mortgage dealings. Add each known filing fee and include a small contingency for late additions.
Because these charges are fixed, they anchor your estimate. When the price or tax is moving, fixed fees define the floor for mandatory items.
Don’t Forget Prorated Rates And Shared Charges
Many sellers overlook prorated council rates and body corporate levies. These are usually split so each party pays for the time they own the property, gently shifting your final figure. Small items, but they still change your take-home.
Get the latest rates notice and, if relevant, the most recent body corporate statement. Note billing periods and due dates, then estimate the days you will own the property this cycle. Use that to rough out your share and likely credits or debits.
If buyers request pre-settlement statements or extra disclosures, include admin charges and courier or urgency fees. Add ‘admin’ line so late costs don’t surprise you.
Build Your Working Net Sheet
Create a simple net sheet that starts with the expected sale price, then deducts each levy or cost. Use today’s assumptions and save a second version for a conservative case. As facts firm up, update and recheck totals.
A one-page layout suffices. Include sale price and settlement date, a bright-line placeholder or $0 with a note, an RLWT line if offshore status applies, filing fees and conveyancing, plus prorated rates, levies, and admin costs.
Name and date each version to track changes. This helps when comparing offers or negotiating settlement timing. A record speeds work with your accountant and lawyer, reducing missed items and last-minute surprises.
Selling well starts with a clean estimate. When you capture timing rules, fixed fees, and your status up front, the rest of the process becomes easier to manage.
Keep your worksheet simple, name each version, and update it as facts arrive. With that habit, your final statement on settlement day should look very close to what you planned.
