Selling Online: When It Is Taxable

🛒 Is your online selling taxable?

Almost everyone in New Zealand sells something online at some point, whether it is old clothes on Facebook Marketplace, a spare fridge on an auction site, or the surfboard you never use. The good news is that most of this selling is not taxable. The money you get from clearing out your own used possessions is generally tax-free, because you are simply turning private property back into cash rather than running a money-making activity. The line that matters to Inland Revenue is not the platform you use or how much a single item sells for, it is your purpose: are you selling off your own belongings, or are you buying goods to resell and making things to sell with the aim of turning a profit? Once your selling shifts from clearing out to trading, the profit becomes taxable income, and above certain sizes you also pick up GST and provisional tax obligations. This guide walks you through where that line sits, the intention to make a profit test, when a side activity becomes a business, the $60,000 GST threshold, provisional tax, what the platform reporting rules do and do not cover, and the records you need to keep.

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                Key Point: Selling your own used personal items is generally not taxable. Buying goods to resell, or making items to sell, with the intention of making a profit is a taxable activity, and that profit is income you must declare.
            

Selling your own personal items (generally not taxable)

If you sell things you bought for your own use and later no longer need, that is a private sale. A spring clean where you list your old furniture, worn clothes, books, a spare appliance or the kids' outgrown gear is not a taxable activity. It does not matter which marketplace you used, and it does not matter if one item sells for a few hundred dollars. You are disposing of private property, not carrying on a business, so there is no income tax to pay on the proceeds.

This holds true even for larger private assets. Selling your own car, boat or household contents because you are moving house or moving overseas is a private sale, not a trading activity. New Zealand has no general capital gains tax, so a one-off gain on a private asset you owned and used is usually outside the tax net entirely.

💡 The test is your purpose, not the platform

Inland Revenue looks at why you acquired the item and what you are doing, not whether you sold it on an auction site, Marketplace, Depop or at a garage sale. The same jumper is tax-free when you sell your own worn one, and taxable when you bought a box of them to flip for profit.

Buying to resell or making to sell (taxable income)

Your selling becomes taxable when there is a profit-making purpose behind it. Two common patterns turn casual selling into taxable income:

Buying to resell: you buy goods, whether new stock, clearance items, sneakers, collectibles or bargains from other sellers, with the intention of selling them on for more than you paid. The profit on those sales is taxable.
Making to sell: you make products, such as candles, jewellery, artwork, baking or furniture, and sell them with the aim of earning money. That income is taxable once the activity is more than an occasional hobby with no profit motive.

When you acquire something for the purpose of selling it on, any gain on that sale is taxable income under New Zealand's income tax rules, regardless of how often you do it. Even a single deliberate buy-to-resell deal can be taxable if you bought the item intending to sell it at a profit. In practice, though, it is the ongoing pattern of trading that most often brings someone into the tax net.

⚠️ Calling it a hobby does not make it tax-free

If you regularly buy and resell to make money, Inland Revenue can treat it as a taxable activity no matter what you call it. The volume, regularity and profit motive matter far more than the label. Genuine one-off declutter sales stay tax-free, but a steady flow of buy-and-flip trades is taxable income.

The intention to make a profit test

The central question Inland Revenue asks is whether you entered into the activity intending to make a profit. If you did, the proceeds are income. This intention is judged on the facts, not just on what you say, so Inland Revenue looks at how you behave. Helpful signals include:

Why you acquired the goods: for your own use, or to sell on
How regularly and how many items you sell
Whether you buy stock, source supplies or hold inventory
Whether you advertise, brand yourself or set out to grow sales
Whether the activity is organised in a business-like way, with pricing, records and systems

No single factor decides it. A person who sells twenty of their own household items over a year is still just decluttering. A person who buys twenty items a week specifically to resell them is trading, even if the money is modest. The more your activity looks like a deliberate, organised effort to make money, the more likely the income is taxable.

📈 When selling becomes a business

There is no single day your selling officially becomes a business. It is a gradual shift, and Inland Revenue looks at the whole picture. As a hobby grows, you may be spending more time on it, selling more goods to more people, and making more money. At some point the activity is clearly being run to make a profit, and from that point it is a business for tax purposes.

Signs your selling has become a business

You buy stock or materials regularly and hold inventory
You sell often and to many different buyers
You set prices to make a margin and track your profit
You advertise, use a shop or store name, or build repeat customers
You put time and effort into growing sales rather than just clearing out

Once you are in business, three tax obligations can apply: income tax on your profit, GST if your turnover is high enough, and provisional tax if your tax bill gets large enough. You also have to keep proper records.

Income tax on your profit

Business selling income is taxed like any other income, at your normal marginal rates. You pay tax on your profit, which is your sales income minus the allowable expenses of earning it, such as the cost of the goods you bought, listing and success fees, packaging and postage, and a fair share of other running costs. You declare this in your income tax return each year. The income tax rates for the 2026/27 year are:

Income Range	Tax Rate
$0 - $15,600	10.5%
$15,601 - $53,500	17.5%
$53,501 - $78,100	30%
$78,101 - $180,000	33%
$180,001+	39%

If your selling is on top of a salary or wage, the profit stacks on top of your existing income, so it is taxed at the rate that applies to your combined total. Someone already earning $60,000 who makes a $5,000 trading profit pays 30% on that profit, because their salary already sits in the 30% band.

💡 Profit, not turnover, is taxed

Income tax applies to your profit, not your total sales. If you sold $30,000 of goods that cost you $22,000, and spent $3,000 on fees, postage and other costs, your taxable profit is $5,000, not $30,000. Keeping the receipts is what lets you claim those costs.

GST registration at $60,000

GST is New Zealand's goods and services tax, charged at 15%. You must register for GST once the turnover from your taxable activity reaches $60,000 in any 12-month period, whether that is the last 12 months or the next 12 months you can reasonably expect. Turnover means your total sales, not your profit, so this threshold can arrive sooner than you expect if you are moving a lot of stock at low margins.

Compulsory: register once your turnover passes $60,000 in a 12-month period, or you expect it to.
Voluntary: you can choose to register below $60,000, which lets you claim GST back on your costs, but you then have to charge GST on your sales and file returns.

Once registered, you add 15% GST to your prices, claim back the GST on your business purchases, and pay the difference to Inland Revenue in your GST returns. Our GST calculator helps you add or remove GST from a price.

⚠️ Turnover is your sales, not your profit

The $60,000 test uses total sales, so a low-margin reselling business can cross it quickly. If you are trading seriously, keep a running total of your sales so you register on time. Registering late can leave you owing GST you did not collect from your customers.

Provisional tax

In your first year of business, your selling profit is still taxable, but you usually pay the tax as a lump sum after the year ends when you file your return. If that tax bill, known as your residual income tax, is more than $5,000, you become a provisional taxpayer for the following year. Provisional tax means you pay next year's tax in instalments during the year, rather than in one hit afterwards, which spreads the load and keeps you from falling behind.

💡 The $5,000 line

If your residual income tax for a year is more than $5,000, you pay provisional tax the next year in instalments. Below $5,000 you generally just pay the balance when you file. Your first year is not tax-free, and making voluntary payments early can earn you an early payment discount.

🔎 Platform reporting and record-keeping

New Zealand has rules that require some online platforms to report seller information to Inland Revenue. These are the digital platform information reporting rules, based on an OECD model, and platforms began collecting the information from 1 January 2024, reporting it to Inland Revenue each year by 7 February. Sellers also get a copy of what is reported about them. It is important to understand exactly what these rules cover, because there is a lot of confusion about them.

What the reporting rules actually cover

The reporting rules apply to platforms that connect people with buyers for listed services, in two broad groups:

Rental of property: short-stay and visitor accommodation, and other property such as carparks, commercial and residential space.
Personal services: ride-sharing and other passenger transport, food and beverage delivery, and services like graphic and web design.

The rules are aimed at the gig and sharing economy. If you rent out a room on a short-stay site, drive for a ride-share app, deliver food, or provide personal services through a platform, that platform may report your earnings to Inland Revenue.

⚠️ Selling goods is not currently in the reporting rules

The reporting rules cover listed services, not the sale of goods. The optional extended standard that would cover selling goods has not been adopted in New Zealand. So a goods marketplace is not currently required to report your goods sales to Inland Revenue under these rules. This does not make trading profits tax-free. If you are buying to resell for a profit, that income is taxable and you must declare it, whether or not any platform reports it.

💡 Inland Revenue can still ask

Even though goods sales are outside the automatic reporting rules, Inland Revenue has broad powers to request information from businesses, including online marketplaces, when it is investigating. The safest approach is simple: if you are trading to make a profit, declare it. Do not assume that unreported means untaxed.

Keeping records

Once your selling is a taxable activity, you must keep records that support the income and expenses in your tax return. Inland Revenue requires you to keep business records for 7 years. Good records also make it much easier to work out your true profit and to claim every cost you are entitled to. Keep:

A record of your sales, including dates, items and amounts received
Receipts for the goods and materials you bought to sell
Platform fees, listing and success fees, and payment processing charges
Postage, packaging and courier costs
A share of other running costs, such as phone, internet or a home workspace, where they relate to the activity

If you are close to the line between decluttering and trading, records also protect you. They show which sales were your own private items and which were bought or made to sell, so you can support your position if Inland Revenue ever asks.

                Rule of thumb: if you would be disappointed to sell an item for less than you paid, you probably bought it to make a profit, and that points towards taxable trading. If you are just glad to see the back of it and get a few dollars, that points towards a private sale.
            

🔢 Worked New Zealand examples

These examples show how the profit test plays out in real situations. Figures use the 2026/27 income tax rates and the current $60,000 GST threshold.

Priya - clearing out the wardrobe (not taxable)

Situation: Priya has a big clear-out and sells her old clothes, a bike and some furniture on online marketplaces over a few months. She raises about $1,900 in total.

Items sold: her own used personal possessions

Purpose: decluttering, no intention to make a profit

She paid more for most items new than she sold them for

Taxable income: $0. This is a private sale of personal items.

💡 Why it is tax-free

Priya did not buy these things to resell. She is turning her own belongings back into cash, so there is no taxable activity, no matter how much a single item sold for.

Sam - flipping sneakers on the side (taxable)

Situation: Sam has a $55,000 salary and spends weekends buying limited-edition sneakers to resell at a profit online. Over the year he sells $28,000 worth. The shoes cost him $18,000, and he spends $2,000 on fees and postage.

Working out the taxable profit:

Sales (turnover): $28,000

Cost of sneakers: -$18,000

Fees and postage: -$2,000

Taxable profit: $8,000

Income tax on the profit:

Sam's salary of $55,000 already sits in the 30% band

The $8,000 profit stacks on top at 30%

$8,000 × 30% = $2,400

Extra tax to pay: about $2,400

⚠️ This is clearly taxable

Sam buys stock specifically to resell for a profit, so the $8,000 is taxable income he must declare, even though it is a side activity. His turnover of $28,000 is under $60,000, so he does not have to register for GST, and his extra tax of $2,400 is under $5,000, so he is not yet a provisional taxpayer. If his trading grows, both of those thresholds could catch him.

Mere - candle making that grew into a business (taxable, GST)

Situation: Mere started making candles for friends, then began selling them online and at markets. This year her sales reached $65,000. Her materials, stall fees, packaging and platform fees came to $28,000.

Income tax on the profit:

Sales: $65,000

Expenses: -$28,000

Taxable profit: $37,000

Tax: $15,600 × 10.5% = $1,638

plus ($37,000 - $15,600) × 17.5% = $3,745

Income tax: about $5,383

💡 Mere crosses two thresholds

Her turnover of $65,000 is over $60,000, so she must register for GST, charge 15% on her candles and file GST returns. Her income tax of about $5,383 is over $5,000, so she becomes a provisional taxpayer for the following year and pays that tax in instalments. She must also keep her records for 7 years.

Josh - selling up before moving overseas (not taxable)

Situation: Josh is moving to Australia and sells his car, his furniture and most of his household goods on Marketplace before he leaves. He raises about $14,000.

Items sold: his own car and household possessions

Purpose: he is leaving the country, not trading

He owned and used these items himself

Taxable income: $0. These are private sales of personal assets.

💡 Big totals can still be tax-free

Even though Josh raised $14,000, none of it is taxable. The amount is high because he is selling everything at once, not because he is trading. New Zealand has no general capital gains tax on private assets like this, so a one-off gain on his own car or furniture is not taxed.

Related tools and guides

GST calculator: add or remove 15% GST from any price.
Side hustle tax calculator: estimate the tax on income from a side activity.
Income tax calculator: work out the tax on your total income.
Side hustle tax guide: tax on cash jobs, gig work and side income.
Business structure basics guide: sole trader, company or partnership.
Bright-line test guide: when selling property is taxed.

Sources

Verified in July 2026 against Inland Revenue (ird.govt.nz): Income from providing goods and services, and Hobbies and businesses (when your hobby becomes a business); Registering for GST (the $60,000 threshold and 15% rate); Provisional tax (the $5,000 residual income tax threshold); and the Digital platform information reporting rules and Information reporting overview (which cover listed services, not the sale of goods). Record-keeping requirement of 7 years is from Inland Revenue's business records guidance.

🎯 Test Your Knowledge

Complete this 10-question quiz to check your understanding of selling online and tax

1. You sell your own used clothes and old furniture online to declutter. Is that income taxable?

No, occasional sales of your own personal items are generally not taxable

Yes, all money received from online sales is taxable

Only if you sell more than $1,000 in a year

Only if you sell on one marketplace rather than another

2. What kind of online selling generally makes the income taxable?

Selling any single item for more than $500

Buying goods to resell or making items to sell with the intention of making a profit

Selling your own car when you move house

Using an online platform instead of a garage sale

3. At what turnover must you register for GST?

$40,000 in a tax year

$75,000 in a tax year

$60,000 in the last 12 months or the next 12 months

There is no threshold, GST is always compulsory

4. Do New Zealand's digital platform reporting rules currently require platforms to report sales of goods to Inland Revenue?

Yes, every online marketplace sale is reported to Inland Revenue

No, the reporting rules cover listed services, not sales of goods

Yes, but only sales above $60,000

No, and that means goods trading profits are tax-free

5. When do you become a provisional taxpayer?

When your residual income tax is more than $5,000

As soon as you make any profit from selling

Only after you register for GST

When your turnover reaches $60,000

6. How long must you keep your business tax records?

2 years

5 years

7 years

You do not need to keep records for online selling

7. Which of these is a sign your selling has become a business?

Selling one expensive item you owned for years

Regularly buying stock to resell for a profit

Giving unwanted items to a friend

Donating old clothes to an op shop

8. What is the current GST rate in New Zealand?

10%

12.5%

15%

20%

9. If you run a taxable selling business, how is that profit taxed?

At a flat rate of 15% on all sales

It is not taxed until you incorporate a company

At your normal income tax rates through your income tax return

Only the GST portion is taxed

10. Which statement best describes the intention to make a profit test?

Whether you sold the item on a well-known platform

Whether you entered the activity intending to make a profit

Whether the buyer paid you in cash or by bank transfer

Whether you made more than $200 in the year

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