Subdivision Tax Issues

Subdividing? What about tax?

Are you considering subdivisions or development of your land, and are wanting to understand the taxation implications of doing so, both from an income tax perspective and GST perspective?

If the answer is yes, then we can assist you in understanding the intricacies of the land taxing provisions. We have been preparing and providing advice for many years, and we cannot stress enough the importance of being pro-active and seeking professional guidance upfront, prior to you taking your first steps down the path of developing and/or subdividing your land into separate titles.

Certainly, the recent changes to the bright-line rues and the deductibility of interest costs which relate to residential land, have added an additional layer of complexity to being able to understand the true costs associated with your proposed undertaking.

In this regard you can read more about the ‘Disposal of Land – to be taxed or not to be taxed?’ in Richard’s series here:

  1. Income tax imposition upon the disposal of land.
  2. Minor subdivision rule
  3. Disposal within five years: bright-line test for residential land 
  4. Disposal: amount from land affected by change and not already in income 
  5. Disposal: amount from major development or division and not already in income 
  6. Disposal: those who may be carrying on a business of land dealing, land development and/or subdivision, or of erecting buildings

While we prefer to provide your guidance in advance of any work commencing on the subdivision scheme, so that you are fully aware of all the potential implications upfront, unfortunately it does not always work out that way. Often we are asked to assist with Inland Revenue enquires, where the land is disposed of at the completion of the project, no land sales income is disclosed in the tax return, and Inland Revenue are now asking some “please explain” type questions. 

If you would like to talk with us about these issues, please fill in the form below, or get in touch here.

  • This field is for validation purposes and should be left unchanged.

solid-icon1b.png
As a client Gilligan Sheppard you will have access to international networks and resources to enable optimal outcomes for your business / trust / transaction. xero logo It’s small business accounting software that’s simple, smart and occasionally magical. Log in online anytime, anywhere on your Mac, PC, tablet or phone to get a real-time view of your cash flow. 
As a client Gilligan Sheppard you will have access to international networks and resources to enable optimal outcomes for your business / trust / transaction. tax traders logo Tax Traders allows you to buy someone else’s tax to settle your account with Inland Revenue, as well as save on interest and late payment penalty charges.
As a client Gilligan Sheppard you will have access to international networks and resources to enable optimal outcomes for your business / trust / transaction. smart ar logo Astute cash flow management is essential for operating a small business.
As a client Gilligan Sheppard you will have access to international networks and resources to enable optimal outcomes for your business / trust / transaction. myob logo Trusted by 1.2 million businesses, myob is New Zealand’s largest accounting solutions provider. The platform is equipped to support the needs of New Zealand organisations.
As a client at Gilligan Sheppard you will access to international networks and resources to enable optimal outcomes for your business/trust/transaction.  accountancy insurance logo Tax Audit Insurance specifically designed for accountants in public practice. This provides cost effective protection and peace of mind against the substantial cost that may be incurred should IR or other government authorities conduct a random review, investigation or audit.
As a client Gilligan Sheppard you will have access to international networks and resources to enable optimal outcomes for your business / trust / transaction. cpa logo A CPA is a finance, accounting and business professional with a specific qualification. It indicates a soundness in depth, breadth and quality of accountancy knowledge and gives you competitive advantage over your peers.
As a client Gilligan Sheppard you will have access to international networks and resources to enable optimal outcomes for your business / trust / transaction. agn international logo AGN International is a worldwide asociation, composed of four regions, of independent accounting and advisory businesses.
solid-icon2.png
Debt Eats Equity
The heading of this article is not original to me; it came from Stuart Nattrass, probably during those conversations around the board table. As a long-term board member of South Canterbury Finance, [...]
End of financial year checklist
It’s that time of year when you’re either scrambling to file your last financial year before the end of March or gearing up to complete another financial year. When preparing for the year-end, [...]
Marketing on a budget: Smart strategies for small to medium businesses
As a business owner, allocating resources effectively is crucial for growth and success. One area that often gets overlooked or underfunded is marketing. However, even modest marketing efforts can [...]
Financial numbers explained…with beer.
My passion as an accountant for small to medium-sized businesses is to “dumb down” accounting to each business owner so they can make informed, comfortable decisions about their business. Often, [...]
Tax Updates: 18 March 2024
Welcome to this week’s review of tax issues where Richard comments on what’s been happening in the world of tax over the past week. If you have a question or would like a second opinion [...]
Tax Updates: 11 March 2024
Welcome to this week’s review of tax issues where Richard comments on what’s been happening in the world of tax over the past week. If you have a question or would like a second opinion [...]
Tax Updates: 26 February 2024
Welcome to this week’s review of tax issues where Richard comments on what’s been happening in the world of tax over the past week. If you have a question or would like a second opinion [...]
Tax Updates: 20 February 2024
Welcome to this week’s review of tax issues where Richard comments on what’s been happening in the world of tax over the past week. If you have a question or would like a second opinion [...]
What is a family office?
What is a “Family Office”, Why have one, what have others done, and what choices exist? The “Family Office” is a relatively new label for a relatively old structure Family offices have their [...]
The difference between a leader and a manager
What’s the most important thing to a company’s sustainable success? After considering the standard metrics such as market, the bottom line and a quality product, the majority would likely say [...]
solid-icon3.png

Click here for details.

We are recognised as authorities in our specialised fields. We publish newsletters with informed opinions that are free for you to subscribe to.

Click here for details.

Richard Ashby (our tax specialist) provides advice, comments and updates on what’s been happening in the world of tax each week.