Anyone know how many houses (in private ownership) a person can sell before there are tax complications?
I heard it is two sales in two years but can't see a reference to it on the IRD site.

masturbidder - 2021-01-07 15:20:00

"The factors looked at will vary because each taxpayer's circumstances are different. For example, buying one property every two years may be considered a regular pattern for one individual and not another."

it's all to do with patterns and intent. See Page 7.

https://www.ird.govt.nz/-/media/project/ir/home/documents/fo
rms-and-guides/ir300---ir399/ir361/ir361-2020.pdf

sparkychap - 2021-01-07 15:55:00

masturbidder wrote:

Anyone know how many houses (in private ownership) a person can sell before there are tax complications?
I heard it is two sales in two years but can't see a reference to it on the IRD site.

Who did you hear it from?

johnston - 2021-01-07 16:57:00

Sell as many as you like, if bought in the last few years you may have to pay some tax, best you look at the ird site yourself. If you make a profit youay have to pay a tiny portion the the tax department. No big deal you dtill making money.

msigg - 2021-01-07 17:02:00

Doesn't the brightline test cover property sold within a certain time period of purchase? Not sure if that is the 'tax' that msigg is referring to? it is a tax on the profit not the whole purchase price.

shanreagh - 2021-01-07 18:58:00

johnston wrote:

Who did you hear it from?

Stuff on the internet, which is why I wondered if others knew about it. Or if it was just some tosser on the internet (and there is no shortage of those).
As I understood what they were saying its not the brightline test, that's quite clear, but if someone sells more than 2 properties in 2(?) years one is classed as a developer.

masturbidder - 2021-01-07 21:29:00

masturbidder wrote:

Stuff on the internet, which is why I wondered if others knew about it. Or if it was just some tosser on the internet (and there is no shortage of those).
As I understood what they were saying its not the brightline test, that's quite clear, but if someone sells more than 2 properties in 2(?) years one is classed as a developer.

Back in the day if JCitizen subdivided one section off the back and sold it he would generally not be liable for tax. If however JCitizen subdivided 2 or more sections off the back or if he owned more than one block of land and subdivided 1 or more section off each within so many years he would probably be considered a developer and taxed as such.

Edited by brouser3 at 11:09 pm, Thu 7 Jan

brouser3 - 2021-01-07 23:09:00

masturbidder wrote:

Stuff on the internet, which is why I wondered if others knew about it. Or if it was just some tosser on the internet (and there is no shortage of those).
As I understood what they were saying its not the brightline test, that's quite clear, but if someone sells more than 2 properties in 2(?) years one is classed as a developer.

#2 directly from IRD. Read that PDF.

sparkychap - 2021-01-08 06:41:00

masturbidder wrote:

Anyone know how many houses (in private ownership) a person can sell before there are tax complications?
I heard it is two sales in two years but can't see a reference to it on the IRD site.

You can use the main home exclusion to the bright line test twice in two years.

https://www.ird.govt.nz/property/buying-and-selling-resident
ial-property/the-brightline-property-rule/exclusions-to-the-
brightline-rule

Prior to brightline there might well have been a 'you look like a developer' number, since brightline that's not going to be very important since brightline catches those anyway.

Edited by bitsy_boffin at 8:02 pm, Sat 9 Jan

bitsy_boffin - 2021-01-09 19:59:00

bitsy_boffin wrote:

You can use the main home exclusion to the bright line test twice in two years.
.

Thanks, I think that was what they were talking about.

masturbidder - 2021-01-09 23:14:00