• Login:
Welcome, Register Here
follow PropertyTalk on facebook follow PropertyTalk on twitter Newsletter follow PropertyTalk on LinkedIn follow PropertyTalk on facebook
Results 1 to 4 of 4
  1. #1

    Default Advice Sought on Subdivision Tax implications

    Quote Originally Posted by cube View Post
    I guess it depends on when the gain would be taxable. If it only when it is realised on sale, then buy and hold becomes even more attractive.

    As for buildings not been depreciable - I don't think that would fly with the commercial property owners who provide the office space for the country, and distinguishing between commercial and residential would quickly become a blurred distinction.

    The argument that tax incentives are effectively the government paying investors to provide a social service (housing) that the the government is unable or unwilling to provide itself holds true. If RE becomes massively unattractive as an investment, then rents will skyrocket and the gvt will be left to pick up the bill and/or the people on the streets.

    Having said that, only current investors would be disadvantaged - once any rule change is in place, the numbers will still be the important thing - can the rent for this property cover its expenses. Whether that is before or after tax or before or after any contribution from the investor (-ve gearing) is a decision for individual investors to make. What changes is the way the numbers are calculated, and the result may be increased rents to make property stack up as an investment.

    Do Aus/UK/US charge CGT - if so, what effect does it have?

    Happy taxing

    cube
    hello, i am planning to subdivide my property and wanted to gift new dwelling to my mother ,does this attract tax?

  2. #2

    Default

    Hi there

    This one may need you go to see an accountant to get it 100% correct as there are a few fish-hooks. I can give a few general taxes that might apply, but with everything - it depends. Get some advice BEFORE you start the subdivision.

    Gifting - There used to be Gift Duty in New Zealand. This is now been removed. However, there may be issues with the recipient (your mother) or you with any benefits from Work and Income or a rest home subsidy.

    When did you purchase the property? The date you gift it is a sale of the land, so the Bright-Line Test may apply. If you sell it before 2 or 5 years, then any gains on the value of the property might be taxable. See the IRD website here: https://www.ird.govt.nz/property/brightline-qa.html

    What was the purpose of doing the subdivision? Did you purchase the property with the intention of making a profit? Are you a property developer? Any of these can also make a gain on the 'sale' taxable.

    Hope that has given you an overview of the potential issues!

    Murray
    Rental Coach
    www.rentalcoach.co.nz

  3. #3
    Join Date
    May 2007
    Location
    Hamilton
    Posts
    3,629

    Default

    Quote Originally Posted by robert786 View Post
    hello, i am planning to subdivide my property and wanted to gift new dwelling to my mother ,does this attract tax?
    Hi Robert, you need to get expert advice from a property accountant.

    Starting point is that a sale from a subdivision is taxable. You also need to consider if GST is payable as well.

    But there are a lot of exemptions, so you might be able to get an exemption, or change around how you are doing it slightly so that an exemption applies.

    Ross
    More Profit from Property? TEACH ME MORE
    Ross Barnett - Coombe Smith Property Accountants
    Proud to give the best property advice for over 13 years.

  4. #4

    Default

    Also consider estate planning, but yes, agree 100% with Ross, who has a great reputation as a property accountant. It'll be the cheapest consultation fee you ever pay.
    Free online Property Investment Course from iFindProperty, a residential investment property agency.


 

Thread Information

Users Browsing this Thread

There are currently 1 users browsing this thread. (0 members and 1 guests)

Similar Threads

  1. Advice Sought on separation reversal impact
    By TAG in forum Property Investment (NZ)
    Replies: 12
    Last Post: 24-08-2017, 06:11 PM
  2. My situation, advice sought.
    By Daynger in forum Property Investment (NZ)
    Replies: 16
    Last Post: 09-10-2016, 05:08 PM
  3. Equity; post-marital separation - advice sought
    By TAG in forum Property Investment (NZ)
    Replies: 8
    Last Post: 26-09-2016, 03:27 PM
  4. Advice sought for a bigger home
    By inoan in forum General (NZ)
    Replies: 7
    Last Post: 07-01-2014, 05:04 PM
  5. Buying strategy advice sought - two auctions / same day
    By FlyingKiwi in forum Property Investment (NZ)
    Replies: 17
    Last Post: 16-12-2013, 01:39 PM
  6. Advice sought
    By Zkcub in forum Property Investment (NZ)
    Replies: 1
    Last Post: 04-06-2013, 05:20 PM
  7. Christchurch Investment Options Advice Sought
    By Firehawk23 in forum Property Investment (NZ)
    Replies: 7
    Last Post: 02-07-2011, 12:04 PM
  8. Mortgage advice sought
    By dragonfly in forum Finance, legal and tax (NZ)
    Replies: 7
    Last Post: 07-07-2010, 05:01 PM
  9. Housing NZ Lease properties -advice sought
    By CD in forum Property Investment (NZ)
    Replies: 1
    Last Post: 10-11-2005, 05:02 PM

Tags for this Thread

Posting Permissions

  • You may not post new threads
  • You may not post replies
  • You may not post attachments
  • You may not edit your posts
  •