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Income Tax Act 2007

Income - Income from business or trade-like activities

CB 12: Disposal: schemes for development or division begun within 10 years

You could also call this:

“Income from selling land developed or divided within 10 years of purchase”

If you sell land, the money you get from it might be counted as income in certain situations. This happens when someone carries out a plan to develop or divide the land into smaller parts. The plan doesn’t have to be a business, but it must involve doing work on the land that isn’t just small changes. This work could be done by you or someone else for you. For this rule to apply, the plan must have started within 10 years of when you first got the land.

There are some exceptions to this rule. If the land is used for homes, business buildings, farms, or investments, different rules might apply. You can find these exceptions in other parts of the law: section CB 17 for homes, section CB 20 for business buildings, section CB 21 for farms, and section CB 23 for investment properties.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1512433.

Topics:
Money and consumer rights > Taxes
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CB 11: Disposal within 10 years of improvement: building business, or

“Tax on land sold within 10 years of improvements by a house-building business”

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CB 13: Disposal: amount from major development or division and not already in income, or

“Taxable income from selling land after major development or division”

Part C Income
Income from business or trade-like activities

CB 12Disposal: schemes for development or division begun within 10 years

  1. An amount that a person derives from disposing of land is income of the person if the amount is derived in the following circumstances:

  2. an undertaking or scheme, which is not necessarily in the nature of a business, is carried on; and
    1. the undertaking or scheme involves the development of the land or the division of the land into lots; and
      1. the person, or another person for them, carries on development or division work on or relating to the land; and
        1. the development or division work is not minor; and
          1. the undertaking or scheme was begun within 10 years of the date on which the person acquired the land.

            1. Subsection (1) is overridden by the exclusions for residential land in section CB 17, for business premises in section CB 20, for farm land in section CB 21, and for investment land in section CB 23.

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