ASSOCIATED PERSONS TRAPS - PART 2

Trap 3 – Tainting for Life
Friends, Jesse and Skylar, are 50% shareholders in a property development company called...
ASSOCIATED PERSONS TRAPS - PART 1
This blog is Part 1 of 2 on traps that arise when land transactions involve “associated persons”. By way of background, both the Income Tax Act and the Goods and Services Tax Act have definitions of associated persons and special rules that apply to transactions between associates.
Property dealers, developers and investors are often party to transactions with associated persons (e.g. restructuring ownership of existing property).
Tax Working Group - Final Report
Capital Gains Tax (CGT): Unsurprisingly, the TWG has recommended that a capital gains tax be implemented. Although there was disagreement amongst the members of the group, the majority are advocating that CGT apply to.....
LOSS RING-FENCING QUESTIONS
But first, in case you missed my last blog, the main points from the draft ring-fencing of losses bill are.....
HOT OFF THE PRESS - RING-FENCING BILL
On 5 December 2018, the Government released the first draft of legislation dealing with the proposed ring-fencing of tax losses from rental properties. First impression on reading the Bill is that it is extraordinarily complicated and leaves questions unanswered. Here is a quick summary of the key points........
My two cents on CGT
- The Tax Working Group (TWG) has ruled out a land tax or an inheritance tax, but appears to me to clearly be pushing towards implementation of CGT. They have noted that it is premature to form a view without firstly determining exactly how the tax may apply, but I would be highly surprised if their final report did not support implementation of CGT.
- The TWG is of the view that CGT should apply across assets broadly, so not restricted solely to real estate. It would also apply to shares, intellectual property, goodwill, business assets etc. The one exception to this will be the family home.
Bright Line Extension to 5 Years
You are probably already familiar with the two-year bright-line test that was introduced in October 2015. Under this test, investment property that is sold within two years of settlement is subject to tax on any increase in value.
The Labour Government has always said they will extend this test to five years. On 15 February it was announced that the new.....
2017 Economic & Property Update - Post Election Video
Watch Matthew Gilligan and Tony Alexander as they give their post-election analysis. They discuss what is likely to happen in the economy and property market over the next 12 months, factors influencing the market, and how you can invest and profit in the current and unfolding conditions.
Labour proposal to ringfence losses
Can property prices keep rising indefinitely?
I was recently asked whether there was an upper limit to the ratio between property price and household income, which in Auckland currently sits at about 10 to 1. In other words, the average property price is worth 10 times the average annual income.
Also known as the median multiple, this is an internationally recognised measure of housing affordability and is calculated by dividing house price by.....