Quote Originally Posted by kiora View Post
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.