Quote Originally Posted by Jay View Post
If I owned a rental property and ran it from home, is that a small business, sounds like one to me, so I would be exempt as well
That's been tried well long ago in the past in Canada. Just as a comparison for conversation, Canada's tax system is extremely complex. After all, IRD did come to Canada in the early years to "copy their GST" system so I would not be surprised if they will copy most of their CGT system. Here's an interesting read how Canada dealt with 'loop holes':

https://torontosun.com/2014/05/05/ti...8-562c33577d27

"Now? The Income Tax Act is 3,206 pages — 1,038,162 words long."

Have a think about it. We are in NZ. Should IRD go down this path? I'm not even sure the NZ laws books have that many pages or words? Over 1 Million words to interpret??? Is that reasonable for a population of 4.5M ? Remember, Canada's tax system was never that complex ; When I studied tax at uni our prof told us the reason why the Cdn ITA book is so big and complex is all to do with the "lawyers" & "accountants" fighting in courts, so the politicians had to re-word the writings in the tax act, by covering loop hole after loop hole. On most part, a lot of it has been modeled off the US IRS tax system. But that's not to say, NZ should follow the same regime?

Jay: I'm well aware of the complexities of CGT in Canada. What you explained doesn't fly there and the way they treat things is IMO, very elaborate to say the least. As an example, my friend back in Canada bought a brand new Mc Mansion house in 2015. As you may not know, new construction Cdn houses are massive to say the lease (typically 1/2 in ground + 2 stories up = effective 3 living levels detached with garage, none of this single story stuff we see in NZ). They only have 1 child so the house was obviously big. The following year, he renovated the basement into a separate dwelling (as these new house have separate 'side door' entrance). His accountant told him that it would be a good $ stream however, my friend did not realise that the portion he rents out "you could say for business" will not be ACCOUNTED for as exemption from CGT. So basically 1/3rd of his house for as long as he owns it, will count as taxable in terms of CGT. He sold his house few months ago to move in a BIGGER house.

Exemptions are one thing. But loops holes are another. Recent news about NZ IWI being exempt from CGT again, is nothing new in Canada. Their 1st Nations "on reserve" are exempt on most forms of taxation (income and sales tax). But when you look at over 90% of the 1st Nations in Canada, their reserves are run down, neglected, with countless of failed so called 'business ventures'. At least the Maori in NZ are by far, more business focused with far more successes. Perhaps it's environmental or genetics.

I just want to say that SHOULD NZ have a complicated tax system like our big OECD nations? If so, then that path will be a nasty one and inefficient for our small level of population. Too many politicians and lawyers in the country but not enough for those that do anything.