Tighter rules for property investors will come into effect soon.
Under the new rules, announced earlier this year, property investors who buy residential property from 1 October 2015 and sell it within two years will pay income tax on the capital gain.
Does this mean that if you buy before then you can avoid this tax? Is it that simple?
Well not really – because the existing “intention” rules will still apply to investment property purchased before that date and subsequently sold, as well as to investment property sold after the two-year period has passed.
It all depends on what Inland Revenue decides your intention was at the time of purchase.
If you intend to hold onto the property long term as an investment, not to sell it for a profit, what evidence do you have to support your position?
New Zealand property tax law is getting ever more complex… it’s best to seek professional advice before investing in property.