Are you a property investor and do you regularly buy and sell properties for profit? If the answer to this question is yes, then you should read on.
Under the previous National lead government income tax was required to be paid on any gains from residential property sold within two (2) years of acquisition, with some exceptions, including the exemption for the main home of owner-occupiers of residential property.
The current Labour lead government signalled prior to last year’s election their intention to extend the “bright-line test” for tax on the disposal of residential land from two (2) years to five (5) years.
Last month, following its third reading in Parliament, an amended Bill was passed by 63 votes to 57 extending the “bright-line test” from two (2) years to five (5) years.
The new rule became effective from 29 March 2018.
What does this mean for you?
This means that profits from residential investment properties which are bought and sold within five (5) years will generally be taxable. Current exemptions from the bright line test still remain in place.
If you require any advice or further information on the matters dealt with in this publication please contact the lawyer at Farry and Co. who normally advises you, or alternatively contact:
Maurice Turketo
mturketo@farry.co.nz
03 477 8870 or 09 379 0055
The information contained in this publication is intended as a guide only. It does not constitute legal advice and should not be relied upon as such. Professional advice should be sought before applying any of the information to particular circumstances. While every reasonable care has been taken in the preparation of this publication, Farry and Co. does not accept liability for any errors it may contain.