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Chris The Lawyer
Chris The Lawyer, Lawyer
Category: New Zealand Law
Satisfied Customers: 14044
Experience:  37 years qualified as a lawyer; LLB, MMgt and FAMINZ.
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Looking to sell property that have lived in and used of

Customer Question

looking to sell property that have lived in and used for business of accommodation have claimed a total of $195,000 in depreciation and 2/3 of build in GST would like to structure sale to minimise the affect of tax
Submitted: 3 months ago.
Category: New Zealand Law
Expert:  Chris The Lawyer replied 3 months ago.

I think you may have asked this question again, so you may want to ask for a refund

Customer: replied 3 months ago.
unfortunately I should have asked an accountant is not really an answer I would have given one star but thought maybe it was my responsibility to be clearer with the initial qestion
Expert:  Chris The Lawyer replied 3 months ago.

When you consider the taxation on the sale of property it is not a simple issue of looking at the depreciation and GST deductions over the history. Your question indicates that you are aware that the will be a taxable profit on the property, but the calculations and the proportions will need to be carefully calculated because you are entitled to take account of the use as a home. If you prepare your own tax returns, then you will need to place appropriate apportionments and divide the items such as GST and any maintenance costs in those proportions. You will also need to get the settlement statements for the purchase, for the sale and again use the proportion, because this will affect the increased value from the purchase to the sale, as the portion for your own use is not taxable. But you have triggered the taxable liability by claiming for depreciation. If you claimed depreciation on the full value, then it may be difficult to persuade Inland Revenue that you can claim the residential proportion is not taxable. So the past decisions will affect the way this is treated in your next tax return. The site is meant for general advice rather than specific advice on how to prepare your return. Without the full background it is impossible to give more than the general advice which I have outlined above. A qualified chartered accountant will be able to resolve the appropriate way to deal with this having regard to the historical tax returns.

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