Should New Zealand have a capital gains tax – or does it effectively have one already? Walker Wayland can look at what gains you’ll pay tax on, and what gains are tax-free.
New Zealand doesn’t have a single, comprehensive capital gains tax, and although the Tax Working Group recommended one, the Prime Minister ruled it out in 2019.
However, we do tax some types of capital gains, particularly those from the sale of investment properties. The bright line test is a tax on capital gains that applies only to property.
Which capital gains are taxed?
Capital gain is the profit you make when you sell an asset. You will pay tax on the gains you make on some assets, including:
- Any gains from the sale of a property that is not your family home, if you have owned for less than 10 years (with some exceptions). This is the bright line test; you can read more about it here.
- Any gains you make on the sale of foreign shares over $50,000.
Which capital gains are not taxed?
Some capital gains remain untaxed, including:
- Any profit from the sale of your family home.
- Any profit on the sale of another property you have owned for at least 10 years (with some exceptions under the bright line test).
- Any KiwiSaver fund gains, and gains on other managed funds, index funds and PIE funds.
- Any gains made from the sale of most New Zealand and Australian listed shares.
- Any gains you make on selling collectibles like wine, art and cars.
- Any profits you make selling items casually on TradeMe or any other online platform.
How this applies to your situation
Everyone’s tax situation is unique, and these rules can be confusing. We’re here to help you wade through the intricacies of it, so you don’t pay more tax than is required. Get in touch with an accountant here at Walker Wayland if you have questions about tax on capital gains, or any other tax. We’d love to hear from you!
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