Inland Revenue Tax Crackdown 2025: Audits, Refunds & What to Do

Audits initiated (H1 2024–25): 3,600, a 50% year-on-year increase ·
Undeclared tax from property (2025): $150 million, a 48% increase on processed cases ·
Four-year recovery target: $800 million in unpaid tax

The table below summarises the key figures from the crackdown.

How is the Inland Revenue tax crackdown driving audits and refunds?

Record 3,600 audits: where is the IR focusing?

• The Inland Revenue opened 3,600 audits in the first six months of the 2024–25 financial year, a 50% increase over the same period the previous year (Inland Revenue compliance update). PwC New Zealand reports that total audits opened for the full 2025 year reached 7,641, up 49% from 2024 (PwC New Zealand year-in-review).

The $150 million property sector investigation

• On 9 May 2025, the IR announced it had uncovered $150 million in undeclared income tax and GST from the property sector in the first nine months of the 2024–25 year (Inland Revenue media release). That $153.5 million figure nearly matches the $156.8 million for the entire previous year. Discrepancies from developers alone hit $72,937,921 — a 48% increase on the same period a year earlier.

The IR says the non-compliance often involves developers claiming GST refunds at the start of projects and then failing to file and pay GST once properties sell (Inland Revenue Annual Report 2025). This pattern is a key focus of the crackdown.

What happens after an audit: refunds, debt, and penalties

• By 31 March 2025, the IR had assessed $880.8 million in additional tax from audit activity (Inland Revenue funding announcement). Not all assessments lead to penalties — some result in refund adjustments or payment plans. The IR reports it had approximately 4,800 audit cases on hand at 30 June 2025, with audit activity 27% higher than in June 2024 (Inland Revenue Annual Report 2025).

The implication: taxpayers under audit face a long queue, but the IR is working through cases faster than before — 6,147 audits closed in 2025, 42% more than 2024 (PwC New Zealand year-in-review).

The scope of the crackdown: record audit volumes and future targets

Beyond property, the IR has announced it will investigate organised crime, the hidden economy, and trusts (Inland Revenue funding announcement). The additional funding approved in 2024 is designed to sustain this higher tempo of compliance work.

• The IR aims to recover $800 million in unpaid tax over the next four years (Inland Revenue Annual Report 2025).
• Total tax debt currently stands at nearly $7.4 billion (Stuff.co.nz report).

The pattern: Enhanced data-matching means the IR is increasingly able to identify non-compliance before a return is even filed.

The Inland Revenue tax crackdown is more than a headline — it’s a structural shift in enforcement that will reshape how property developers, landlords, and high-risk taxpayers interact with the tax system. For New Zealand property owners and developers, the choice is clear: tighten your compliance processes now, or face a lengthy audit and penalty cycle that the IR is fully resourced to pursue.