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  1. #1
    Join Date
    Oct 2005
    Location
    Auckland, NZ.
    Posts
    621

    Default Subdividing and Building vs just Subdividing and selling Section

    Hi all,

    If I subdivide>Build>Sell I'm paying tax due to engaging in a development

    If I just subdivide and sell title to an empty section am I paying tax?

    Grazie,
    SK

  2. #2

    Default

    Best you talk to a good accountant.

    There are a number of things that need to be considered.
    1 - How long have you held the property
    2 - Is it your home (OO) or an investment
    3 - What is your intent? - it's hard to argue that your intent of subdivision was not to sell for a profit so hard to say it's not taxable

    My first thought would be that you'd pay tax either way but worth investing a few hundred bucks for advice.

  3. #3
    Join Date
    Oct 2005
    Location
    Auckland, NZ.
    Posts
    621

    Default

    Quote Originally Posted by Don't believe the Hype View Post
    Best you talk to a good accountant.

    There are a number of things that need to be considered.
    1 - How long have you held the property
    2 - Is it your home (OO) or an investment
    3 - What is your intent? - it's hard to argue that your intent of subdivision was not to sell for a profit so hard to say it's not taxable

    My first thought would be that you'd pay tax either way but worth investing a few hundred bucks for advice.
    Ah yes, incomplete info sorry
    1 - 12 yrs
    2 - Investment - never lived in it
    3 - make a lot of money with minimal effort!
    (yes i see your point, initial intent was not speculation however.....will see what the accountant says)

  4. #4
    Join Date
    Oct 2013
    Posts
    1,610

    Default

    You're probably ok on this one. The Income Tax Act section CB12 states that profits from a subdivision are taxable if the scheme is undertaken within 10 years of the purchase date. You've held it longer than that, so you're not automatically caught by the subdivision tax law.

    Speak to your own accountant who knows your full situation to confirm you're not caught by anything else, but looks pretty good to me.
    AAT Accounting Services - Property Specialist Accounting - AATAccounting.co.nz
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