Who'd want to be a landlord now ?

[kiora]

Doesn't seem like much CGT for all those audits
https://www.stuff.co.nz/business/118...3+January+2020

[Aaron]

Doesn't seem like much CGT for all those audits
https://www.stuff.co.nz/business/118...3+January+2020

$12.5mill taxes or $37.8mill in profits (assuming the top tax rate) possibly closer to $50mill. assuming an average of 25% tax rate for one year.

Better than a kick in the pants.

[Balance]

$12.5mill taxes or $37.8mill in profits (assuming the top tax rate) possibly closer to $50mill. assuming an average of 25% tax rate for one year.

Better than a kick in the pants.

Then there are those who ‘voluntarily’ agree to pay tax on their property gains after becoming aware of that audits.

[Aaron]

Then there are those who ‘voluntarily’ agree to pay tax on their property gains after becoming aware of that audits.

True, because the extension of the bright line test to 5 years was a recent adjustment, I had heard the IRD contacted people to tell them they may have missed something from their tax returns and if you don't want late payment and shortfall penalties maybe you want to revisit your calculations before we audit. The bright line test is pretty cut and dried in many cases so it would be interesting to know how much was voluntarily disclosed after contact from IRD prior to being audited.

[SBQ]

Doesn't seem like much CGT for all those audits
https://www.stuff.co.nz/business/118...3+January+2020

Which goes to show that the tax laws in NZ are not on a fair playing field. As a matter of comparison, in Canada when you purchase property you have to disclose to the lawyer / conveyance person why you're buying it? there's a tick box list of things like 'your 1st home', 'vacation home', non-resident home, and many others. NZ's taxing of property speculators is no different than in Canada. Actually there are 3 major categories that the tax authority views on house / land purchase. If you're in the business of dealing with buying and selling real estate, then of course the gains on the sale of your assets (the houses) will be taxed at same business income rates (no different to in NZ). If you bought the house as an individual and it turns out you're in the building trade, then the gains would be classed as regular individual income tax rates. If you bought the house and made improvements to the house in a renovation, then the 'adjusted cost base' would have to be changed and the house would get revalued for taxation and of course, the intent is the key ; auditors will ask did you renovate with intention to sell? If so, then the gains on the sale will be at capital gains rates. So what i'm getting at is what IRD has done is they have not spelled out clearly (as in that article) what is taxable when making gains on the sale of property. Too many loops holes in my opinion because something like this would never happen in Canada ; they don't even have such a brightline test criteria - the declaration status is determined at the time of purchase and at time when the house is sold.

@ Bjauck:

What I was getting at is at school, the smart students that do so well (and of course work hard) are well rewarded and those that fall behind... they just get left in the corner. But in the realm of investments in NZ, it's only those that have the $ are the ones that can take advantage of buying NZ residential properties and be able to sell near retirement with tax free capital gains. Those that are on the low end class status in NZ have only... Kiwi Saver for which is subjected to a lot more taxes throughout the entire investing scheme. That's unfair and that's why Canada addressed this issue decades ago. The rich shouldn't be the only ones that can make $ and 'be advantaged'. Just like at uni, the smart or clever students are the only ones that can get scholarships. It's all wrong.