Do I have to pay capital gains tax?
Question from erin baird updated on 14th February 2008:
Our expert responded:
Assuming you buy a property with the intention of owning it long term (and hopefully this is documented), then there will be no tax payable on any capital gain. It is always an idea to document your reasons for selling a property, such as financial difficulties or a bad investment property. However, you will have to pay tax on any depreciation recovered, that is, where the book value of the asset is less than the sale value. If you bought the property with an intention to sell it in say five years, and this can be proven, then there will be tax payable on any capital gain.
Landlords Bookstore recommends:
Property Tax in NZ - A NZ Investor's Guide (2006 ed)
By Mark Withers $34.95
Kenina Court is a director of Acorn Solutions Limited, an accounting firm dedicated to working with clients to help them create wealth. She is an avid property investor, entrepreneur and seminar presenter on asset protection and wealth strategies.