Buying and Selling Residential Property - Property Tax
Whether you have to pay tax on property you sell depends on a number of factors including your reason or intention at the time you bought the property. When deciding whether or not you should pay tax on the profit from the sale of a property, the IRD look at your intention when you bought it. If you bought the property with the firm intention of selling it when prices rise - to make a gain from the increase in the property’s value - the profit is likely to be taxable.
However, if you bought the property to provide a home for your family, any profit from the eventual resale will most likely not be taxable, unless you have a history of regularly buying and selling properties. A good test is to ask yourself “what were my reasons for buying this property?”
This guide is primarily aimed at individuals. Builders, developers, dealers, etc should talk to their tax professional as different rules may apply. See attached booklet for further information.
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