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New Zealand

Selling Indian property while you are a New Zealand tax resident

New Zealand has no general capital gains tax, so a long-held Indian property is usually taxed only by India.

You are selling a property in India, and you are a tax resident of New Zealand. The good news is that New Zealand has no general capital gains tax, so for a property you have held a while, India's tax is usually the only one. But there is a specific exception, the bright-line test, that can bring New Zealand tax if you sell soon after buying, and it reaches overseas property too. Here is how the sale really works.
Last reviewed: 26 July 20266 min readReviewed by Preetesh Maloo, CA

The short answer

India taxes the whole gain on your Indian property at 12.5% without indexation, with the buyer deducting TDS under Section 195. New Zealand has no general capital gains tax, so a gain on a property you have held for a while is generally not taxed in NZ at all, which means India's 12.5% is the only tax. The exception is the bright-line test: if you sell residential property within two years of buying it, New Zealand taxes the gain as income, with a credit for the India tax, and this test applies to overseas property held by a NZ resident too. A recent migrant may also be sheltered by the four-year transitional-resident exemption.

References on this page

  • India taxes the full gain: LTCG 12.5% without indexation (from 23 July 2024), no grandfathering or forex relief for NRIs, TDS under Section 195
  • New Zealand has no general capital gains tax, so a long-held Indian property gain is generally not taxed in NZ
  • The bright-line test (2 years from 1 July 2024) taxes a quick resale of residential land, including overseas property, with a credit for the India tax
  • A recent migrant may be sheltered by the 4-year transitional-resident exemption

The India side: the whole gain at 12.5%

India taxes the full capital gain from your original cost. For long-term property sold on or after 23 July 2024, the rate is 12.5% without indexation, and as an NRI you get neither the resident option of 20% with indexation nor any currency relief for the rupee's fall, so the whole rupee gain is taxed. The buyer must deduct TDS under Section 195 on the gain, plus surcharge and cess, not the small 1% that applies to a resident seller. A lower-deduction certificate reduces the withholding, and any excess is reclaimed by filing an Indian return.

New Zealand: usually nothing, unless the bright-line bites

New Zealand is unusual among the countries Indians move to in having no general capital gains tax. So a gain on selling your Indian property is, as a rule, simply not taxed in New Zealand, and India's 12.5% is the only tax you pay. For most people selling a property they have owned for years, that is the whole story.

The exception is the bright-line test. If you sell residential land within two years of buying it, that quick gain is taxed as income in New Zealand, and importantly, the test applies to overseas residential property held by a NZ resident, not just NZ land. Where it bites, New Zealand taxes the gain but gives a credit for the India tax, since India has the primary right to tax Indian property. A separate shelter can also apply: a recent migrant within the roughly four-year transitional-resident window is generally exempt in NZ on this foreign-sourced gain anyway. So the practical rule is: a long-held Indian property is taxed only by India at 12.5%, and only a sale within two years of buying brings a New Zealand charge, with a credit.

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What's involved

What the CA actually does

  1. 1

    We compute the real Indian gain

    We work the gain from your original cost with the correct 12.5% NRI treatment, so the Indian tax is right and not overpaid.

  2. 2

    We cut the TDS to the real tax

    We get a lower-deduction certificate so the buyer withholds on your actual gain, not the gross, and reclaim any excess on your return.

  3. 3

    We check the bright-line and window

    We flag whether a quick resale falls in the two-year bright-line period, or whether the four-year transitional window shelters the gain in NZ.

  4. 4

    We support any NZ credit

    Where the bright-line applies, we give your NZ accountant the India-tax-paid detail so the credit is claimed.

What to have ready

Documents you'll typically need

  • The original purchase deed and rupee cost
  • The purchase and sale dates, for the bright-line test
  • The sale agreement and the buyer's TDS
  • Your PAN, NZ residency date and tax details

Frequently asked questions

Common questions

Selling Indian property from New Zealand?

Tell us the dates and figures. A practising CA will size the Indian tax and check the bright-line on a free call, no obligation.

No card, no obligation. All certification and filing work is handled by ICAI-registered practising Chartered Accountants.