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Income Tax Act 2007

Income - Income from business or trade-like activities

CB 9: Disposal within 10 years: land dealing business

You could also call this:

“Income from selling land within 10 years if you or a close associate deal in land”

If you sell land within 10 years of buying it, the money you get from selling it might be counted as income. This happens in two situations:

First, if you were running a business of dealing in land when you bought the property. It doesn’t matter if you bought the land for your business or not.

Second, if someone close to you (like a family member or business partner) was running a land dealing business when you bought the property. It doesn’t matter if you were in the land dealing business yourself, or if the land was bought for their business.

There are some exceptions to these rules. If you’re connected to a local council or if you’re a company in the same group as Kāinga Ora–Homes and Communities, different rules might apply. There are also special rules for residential land and business premises.

To understand more about these exceptions, you can look at sections CB 15C and CB 15D, section CB 16, and section CB 19 of the law.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512421.

Topics:
Money and consumer rights > Taxes
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CB 8: Disposal: land used for landfill, if notice of election, or

“Tax rules for selling land previously used as a landfill if you notify the tax office”

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CB 10: Disposal within 10 years: land development or subdivision business, or

“Income rules for selling land within 10 years if you or someone close to you is in land development”

Part C Income
Income from business or trade-like activities

CB 9Disposal within 10 years: land dealing business

  1. An amount that a person derives from disposing of land is income of the person if—

  2. they dispose of the land within 10 years of acquiring it; and
    1. at the time they acquired the land, they carried on a business of dealing in land, whether or not the land was acquired for the purpose of the business.

      1. An amount that a person (person A) derives from disposing of land within 10 years of acquiring it is income of person A if a person (person B) associated with them at the time the land was acquired carried on a business of dealing in land, whether or not—

      2. person A carried on a business of dealing in land; or
        1. the land was acquired for the purpose of person B’s business.

          1. Subsection (2) is overridden by the exclusions in sections CB 15C and CB 15D, for bodies linked or associated with a local authority and for companies in the same wholly-owned group as Kāinga Ora–Homes and Communities, and subsections (1) and (2) are overridden by the exclusions in sections CB 16 and CB 19, for residential land and for business premises.

          Compare
          Notes
          • Section CB 9(3): replaced (with effect on 1 July 2017), on , by section 116 of the Taxation (Annual Rates for 2018–19, Modernising Tax Administration, and Remedial Matters) Act 2019 (2019 No 5).
          • Section CB 9(3): amended (with effect on 1 October 2019), on , by section 190 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
          • Section CB 9 list of defined terms Kāinga Ora–Homes and Communities: inserted (with effect on 1 October 2019), on , by section 190 of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).