While New Zealand doesn’t have a comprehensive capital gains tax, the sale of land is one area which has specific capital gains tax laws.

 

Most people are aware of the "bright-line test" which will tax properties purchased and sold within certain periods of time. While that sounds simple - the complexities added in recent years means it is far from simple. There are many examples of the bright-line test applying to tax the sale of the family home, due to the wording used for the "main home exemption". 

 

What people often do not realise is that the bright-line test is only a backup tax. There is an entire body of tax law which was enacted to tax a wide range of other transactions involving the sale of land.  GST on the sale of properties is also a highly complicated area of law and contributes to many professional indemnity insurance claims for conveyancing lawyers every year.

 

Inland Revenue has a “property compliance team” which is dedicated to investigating whether the correct tax (both GST and income tax) has been paid in relation to land and property transactions.  With the requirement to provide an IRD number at settlement, Inland Revenue knows about every property transaction in New Zealand faster than ever before. 

 

These are all very common transactions, but if not dealt with correctly, can have very nasty tax consequences.  We are experts in New Zealand tax, and the taxing provisions of property and we are able to assist you with specialist tax advice in relation to all aspects connected with property.  Julia has extensive experience working with large corporate property groups, developers, construction companies, property investors and individuals to ensure this complex area of tax law is dealt with correctly and tax efficiently. 

 

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