IRD potentially misleading over off-the-plan property sales
The brochure states that the IRD will presume an intention of sale for all property sold prior to a contract going unconditional.
NZICA tax director Craig Macalister says this means that if a person made a deposit on a property with the intention to live in that property, but subsequently had a change of circumstances and decided to sell it before the contract went unconditional, then any gain made on that transaction would be taxable.
"The Institute is concerned that it is unlikely Parliament ever intended such transactions to be taxable.
Furthermore the IRD view is not based on settled law. Rather, it is a fine point of law that has been pursued by Inland Revenue in some recent cases."
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