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Income Tax Act 2007

Timing and quantifying rules - Terminating provisions

EZ 2: Deductions for disposal of property: 1982–83 and 1989–90 income years

You could also call this:

“Rules for deductions when selling long-held property”

In this part of the law, you’ll learn about special rules for deductions when selling property in New Zealand. These rules apply to specific income years in the past.

If you owned land or buildings before the end of the 1989-90 income year, and if selling them then would have given you a capital gain (not taxed as income), you can claim a deduction. The amount you can deduct is the market value of the property on the last day of the 1989-90 income year.

There’s also a rule for property you owned before the end of the 1982-83 income year. If the first rule doesn’t apply to your property, you can claim a deduction based on something called the “specified base cost for 1983 income year property”.

These rules help figure out how much you can deduct when you sell certain properties that you’ve owned for a long time.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM1515981.

Topics:
Money and consumer rights > Taxes
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EZ 1: Life insurers acquiring property before 1 April 1988, or

“Tax deductions for life insurers selling certain pre-1988 property”

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EZ 3: Petroleum development expenditure from 1 October 1990 to 15 December 1991, or

“Deductions for oil and gas development costs from late 1990 to late 1991”

Part E Timing and quantifying rules
Terminating provisions

EZ 2Deductions for disposal of property: 1982–83 and 1989–90 income years

  1. For the purposes of this Act, for property to which both the following apply, the amount of the deduction is the market value of the property on the last day of the 1989–90 income year:

  2. the property is land or buildings acquired on or before the last day of the 1989–90 income year; and
    1. the profit from the property’s disposal on or before the last day of the 1989–90 income year, had it been disposed of then at a profit, would have been a capital profit or gain and not a profit on disposal of an investment subject to income tax under section 204 of the Income Tax Act 1976 (as that section was immediately before its repeal and substitution by section 13(1) of the Income Tax Amendment Act (No 2) 1990).

      1. For the purposes of this Act, for property to which both the following apply, the amount of the deduction is the specified base cost for 1983 income year property:

      2. the property was acquired on or before the last day of the 1982–83 income year; and
        1. subsection (1) does not apply to the property.

          Compare
          Notes
          • Section EZ 2(1) heading: substituted, on , by section 194(1) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
          • Section EZ 2(1): amended, on , by section 194(2) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
          • Section EZ 2(2) heading: substituted, on , by section 194(3) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).
          • Section EZ 2(2): amended, on , by section 194(4) of the Taxation (International Taxation, Life Insurance, and Remedial Matters) Act 2009 (2009 No 34).