Recommended NZ | Guide to Money | Gimme: Competitions - Giveaways

Gains on property sales targeted from today

Read More:
Contributor:
Fuseworks Media
Fuseworks Media
Gains on property sales targeted from today

Revenue Minister Todd McClay says the new bright-line test, which comes into force today, will improve compliance with the current residential land sale rules and help to ensure that people pay their fair share of tax on gains from property sales.

"Any gains made on residential property purchased and sold within two years, will be subject to income tax, with some exceptions. The exceptions include the sale of an owner’s main home, inherited property, or the transfer of property in a relationship settlement.

"It will supplement the current "intention" test in the Income Tax Act 2007, which can be difficult to enforce.

"The bright-line test makes it clear that all property buyers, including overseas buyers, who buy and sell a residential property within two years, will be taxed on their gains," says Mr McClay.

The proposed new test will only apply to the sale of "residential land" - it does not apply to land predominantly used as business premises or farmland.

"The bright-line test defines the start and end of the two-year period as beginning when a person obtains registered title for the property, and ending when the person enters into an agreement to sell the property.

There are also rules around ‘buying off the plan’.

"The bright-line test is about fairness and clarity. With few exceptions, if you are selling anything other than your family home for a fast gain, you will now pay the tax you owe."

All articles and comments on Voxy.co.nz have been submitted by our community of users. Please notify us through our contact form if you believe an item on this site breaches our community guidelines.

Personal Finance guides from guide2.co.nz

The latest money guides from authoritative New Zealand sources: Investing, KiwiSaver & Saving, Managing Money, Home Loans, Credit Cards, Tax.

Links will take you to guide2.co.nz.

Connect with Voxy

Voxy on Google Plus     Join Voxy on Google+.

 

Credit Card Comparison TablesCompare Credit Cards - Interest rate and fees comparisons for New Zealand banks.