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Income Tax Act 2007

Deductions - Terminating provisions

DZ 24: Amounts denied before 1 April 2025: treatment upon disposal of certain residential property

You could also call this:

“Selling a rental home: using old expenses to reduce your tax”

If you have a property and you were not allowed to claim some expenses before 1 April 2025, you might still be able to use those expenses when you sell the property. You can use those expenses as a cost when you work out your income from selling the property, if the income from the sale is taxed under section CB 6A. This means you can subtract those expenses from the income you made from selling the property.

If you have a residential rental property and you were not allowed to claim some expenses before 1 April 2025, you might still be able to claim those expenses when you sell the property. You can claim those expenses as a deduction in the year you sell the property, if the property is taxed under a different rule than section CB 6A. You will need to follow the rules in subpart EL to work out how to claim those expenses.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=LMS1433423.

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Part D Deductions
Terminating provisions

DZ 24Amounts denied before 1 April 2025: treatment upon disposal of certain residential property

  1. An amount that has been denied as a deduction for property under section DH 8 (Deduction not allowed) before 1 April 2025 and that would have otherwise been allowed as a deduction is treated under section DB 23 (Cost of revenue account property) as a cost for the person of the relevant property in the income year of the disposal of the property if the amount derived from the disposal is income under section CB 6A (Disposal within 2 years: bright-line test for residential land).

  2. An amount that has been denied as a deduction for property under section DH 8 before 1 April 2025 and that would have otherwise been allowed as a deduction is allowed as a deduction in the income year of the disposal of the relevant property, and is subject to allocation under subpart EL (Allocation of deductions for excess residential land expenditure), if the property is or was residential rental property for the purposes of subpart EL and the amount derived from the disposal of the property—

  3. is income under a section other than section CB 6A; and
    1. is not income under section CB 6A.

      Notes
      • Section DZ 24: inserted, on , by section 53 of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).