Homeowners planning to make a quick buck renting their houses during the Rugby World Cup need to be careful - the taxman is watching you.
Inland Revenue Commissioner Robert Russell says the department will monitor websites and other places where homeowners advertise.
Neil Russ, tax partner for law firm Buddle Findlay, said homeowners who failed to pay taxes for renting their homes - even temporarily - could face serious consequences, including criminal proceedings.
And homeowners who thought they could head overseas to spend their ill-gotten gains might be wise to think again, Mr Russ said.
"Nowadays, there's an electronic trail ... The taxman's quite good at following the money."
Property Investors Federation vice-president Andrew King said people renting their homes during the world cup might be doing so for the first time - potentially making them unaware of their tax obligations.
"[Homeowners] should go and get some books on renting just to be able to get an idea of what [tax] they're due to pay and also what they can claim as expenses and things like that," he said.
Yesterday, the IRD announced a crackdown on NZ's untaxed "hidden economy" as it released its annual Compliance Focus report, which said ticket scalping could also become an issue at the cup.
The IRD says it will also focus on the hospitality, agricultural, horticultural and scrap-metal sectors in the next year.
Scrap metal is now a significant export industry, with an annual turnover of $2 billion, according to the IRD. The industry offers "cash for scrap", which the department says raises issues around tax.
Mr Russell said the IRD would work with legitimate businesses in the scrap-metal sector to locate those not paying their taxes.
The IRD report said the hospitality sector would be scrutinised, as would agricultural and horticultural contractors, because tax evasion schemes had been operating in those sectors for some time.
Mr Russell said that GST rising to 15% in October would give people more incentive to avoid paying it, although the IRD did not expect a major impact on tax evasion figures.
Rugby renters - What you need to know
• Any income received from renting land and property is subject to tax.
• That income must be declared in an annual income tax return.
• Homeowners can claim back deductions on that tax for the costs incurred in gaining the income, such as electricity and cleaning.
