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We have recently purchased some land in NZ, demolished the existing house and have consent to subdivide and build 2 identical new houses. We will live in one as our family home and plan to sell the other.
We are not in the business of dealing or development, this is our first project.
We'd like to get a feel for our tax obligations when we sell the additional house. I understand from reading the income tax act (cb6 & 12) that we will have to pay tax on the profit from the sale, but am unsure how to calculate the expenses from this project and appropriate them between the build and the house on the newly subdivided site. Is profit = revenue - all building costs?
We are not in the business of dealing or development, this is our first project.
We'd like to get a feel for our tax obligations when we sell the additional house. I understand from reading the income tax act (cb6 & 12) that we will have to pay tax on the profit from the sale, but am unsure how to calculate the expenses from this project and appropriate them between the build and the house on the newly subdivided site. Is profit = revenue - all building costs?
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