Bright-line rule for residential land transactions
Posted on October 16 , 2018
We’ve noticed an increased number of queries regarding the bright-line rule for residential land transactions. Given this rule is one of the IRD’s review areas, we think it’s timely to remind you a few key facts regarding this rule:
The bright-line rule applies for residential land acquired on or after 1 October 2015.
With effect from 29 March 2018, gain from sale of residential land is subject to tax if the sale is within five years of acquisition. (Before 29 March 2018, the test period was two years.) Reliefs from the bright-line rule are only for limited circumstances (generally, main home, relationship property settlement and death).
The bright-line test applies to residential land situated in NZ regardless whether the owner is a NZ resident or not. It also applies to residential land situated overseas if the owner is a NZ tax resident and doesn’t have transitional resident exemption and/or double tax agreement relief.
For a standard house purchase, the five-year period starts from the date when the transfer of title is registered and ends on the date when a sale and purchase agreement to dispose the land is entered into. It’s important that you know these dates. It’s also important that you keep copies of all relevant acquisition and disposal documentation, including copies of invoices for relevant expenses.
If you have subdividing land, acquisition “off the plans” and/or other non-standard circumstance, the start and end dates of the five-year period are determined differently. Please ensure you seek further advice on this.
Finally, the existing land taxing provisions continue to apply in addition to the bright-line rule. If you are involved in or associated with land dealing, development, subdividing, or building activities, you’re likely to be subject to the land taxing provisions anyway.
We hope the above information helps. A Chinese version of the above information is available as follows for your information.
Please note that the above information is for your information only and does not constitute a tax opinion or advice. If you require specific tax advice, please contact us or your tax adviser.
近期有关明线规则的问题有所增多。鉴于该规则是税局的一个检查要点，我们觉得有必要重申一下有关该规则的几个要点，希望对大家有帮助。
1. 自2015年10月1日起购置的住宅用地都受明线规则影响。
2. 自2018年3月29日起，住宅用地在购买后五年内出售所得须纳税。在此之前，明线期限为两年。明线规则的豁免很有限，一般仅限于自住房，关系财产或遗产。
3. 新西兰境内的住宅用地都受明线规则影响，无论业主是否是新西兰居民。另外，新西兰居民的海外住宅用地也受明线规则影响，除非业主是过渡性居民或有双重征税减免协议豁免。
4. 对于标准的房屋购买，明线的五年期限是从所有权转让登记之日算起，到土地销售买卖协议签署之日为止。这些重要日期请务必了解清楚。另外，保留所有买卖相关文件及费用发票也同样重要。
5. 对于土地分割，楼花等其他非标准的住房买卖，明线期限的计算方式有所不同。 如有必要请咨询专业意见。
6. 最后，除了明线规则外，现有的土地征税规则仍然适用。 如果您或关联人涉及土地交易，开发，分割或其它建筑活动，即使不受明线规则影响，也可能需按土地征税规定纳税。
声明: 以上内容仅供参考，不构成税务看法或意见。如需税务建议，请联系我们或您的税务顾问。