Not a trader!

Our Experts Answer:

If I'm following you correctly the property is already an a LAQC, this means you will already have defaulted to QC or alternatively elected to become a LTC. Be that as it may the tax outcome on sale of the property would normally be dictated by the intention at the point of acquisition. Where the property has been held for only a short period there is a greater likelihood that the revenue may choose to challenge you on whether an intention to onsell existed at the point of acquisition. Having evidence to prove your intention at acquisition is vital if these arguments do develop. Company resolutions, fixed rate loan agreements, lettters or emails to accountants, bankers and lawyers are all good evidence. To a lesser extent, your current reasons for sale can be relevant also particulaly if they did not exist when the property was acquired. Be careful to ensure you claim no deductions for the time you are residing in the property. The IRD take a dim view of shareholders residing in their LAQC or LTC properties. Make sure you declare your depreciation recovery on sale assuming you do achieve a gain.