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Income Tax Act 2007

Recharacterisation of certain transactions - Transfers of relationship property

FB 3A: Residential land

You could also call this:

"Rules for taxing land when you split it in a relationship breakup"

When you transfer residential land as part of a relationship property settlement, it is treated as if you sold the land and bought it back for the same price you originally paid. You are considered to have disposed of the land and acquired it again for the total cost of the land to you at the date of transfer. The bright-line start date for the person getting the land is the same as the bright-line start date for the person who originally owned the land, as explained in sections CB 6A and CB 16A, and Part D of the Income Tax Act.

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This page was last updated on

View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6663126.

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"Land transferred in relationship property settlements"

Part FRecharacterisation of certain transactions
Transfers of relationship property

FB 3AResidential land

  1. This section applies for the purposes of sections CB 6A and CB 16A (which relate to the bright-line test for residential land), and Part D (Deductions) when residential land is transferred on a settlement of relationship property.

  2. The transfer is treated as a disposal and acquisition for an amount that equals the total cost of the residential land to the transferor at the date of transfer.

  3. The transferee’s bright-line start date for the land is the transferor’s bright-line start date.

Notes
  • Section FB 3A: inserted (with effect on 1 October 2015 and applying to a person’s disposal of residential land if the date that the person first acquires an estate or interest in the residential land is on or after that date), on , by section 12(1) of the Taxation (Bright-line Test for Residential Land) Act 2015 (2015 No 111).
  • Section FB 3A(1): amended, on , by section 127 of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).
  • Section FB 3A(1): amended (with effect on 27 March 2021), on , by section 61(1) of the Taxation (Annual Rates for 2020–21, Feasibility Expenditure, and Remedial Matters) Act 2021 (2021 No 8).
  • Section FB 3A(1): amended, on , by section 115(1) of the Taxation (KiwiSaver, Student Loans, and Remedial Matters) Act 2020 (2020 No 5).
  • Section FB 3A(3) heading: replaced, on , by section 59(1) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
  • Section FB 3A(3): replaced, on , by section 59(1) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).
  • Section FB 3A list of defined terms bright-line start date: inserted, on , by section 59(2) of the Taxation (Annual Rates for 2024–25, Emergency Response, and Remedial Measures) Act 2025 (2025 No 9).