Is there a capital gains tax in New Zealand?

New Zealand has no general capital gains tax, but it has an intention-based tax system for land and several specific provisions in the Income Tax Act 2007 that catch various property sale scenarios. If you bought with the intention of resale, sold within 2 years (bright-line), are a dealer/developer/builder, or your sale involves subdivision or rezoning, the gain is taxable as ordinary income. Many people assume 'no CGT means no tax' and are surprised to get a tax bill from a sale. Run your situation through each of the land sale provisions before assuming you're safe.

What is the 'purpose of resale' test in section CB 6?

Section CB 6 catches any land acquired with an intention or purpose of resale, regardless of how long you hold it. This is the broadest provision - there's no time limit. If at the time of acquiring the land you had an intention to resell (even a subordinate one), the gain on sale is fully taxable. The intention is assessed at the time of acquisition based on contemporaneous evidence (correspondence, what you told others, circumstances of the purchase). A pure investment intention (rent and hold indefinitely) usually escapes section CB 6 - but if you told the real estate agent 'I'm going to flip this', you've created evidence that will follow you.

Who is a 'property dealer' under section CB 7?

Anyone who deals in land as a business. This isn't limited to people with a 'real estate dealer' title - it's based on the actual pattern of activity. Buying, renovating, and selling 3+ properties in quick succession can make you a dealer. Once you're classified as a dealer, ALL land sold is taxable regardless of holding period or bright-line status. Dealers also cannot use the main home exclusion. Section CB 7 has severe 'tainting' effects - personal sales can be tainted by your business. If you're unsure whether your activity counts, get tax advice before making the next purchase.

What is the 10-year builder rule?

Section CB 9 catches sales of land by builders (or people associated with builders) within 10 years of the building work. If you or your company erected or contracted the erection of a building on the land, selling within 10 years of that work makes the gain taxable. This applies even if the building work was on a neighbouring property - the tainting can be wide. 'Builder' is defined broadly - it includes companies and their shareholders, not just registered LBPs. If you've done any construction work in connection with the land, check CB 9 before selling.

How do all these rules interact?

Only one rule needs to apply to make the gain taxable. Each provision is tested independently. The bright-line test (s CB 6A) is the most automatic - it applies to residential property regardless of intention. The other rules (purpose of resale, dealer, developer, builder, subdivision, rezoning) each have their own tests. If ANY of them catch your sale, you're taxable. Exclusions (main home, farmland, business premises) only apply to specific provisions and not others. This calculator tests each rule independently so you can see which specific provision is the issue.

NZ Property Sale Tax Triggers Calculator (All Rules)

The bright-line test gets most of the attention, but it's just one of eight land sale rules in the Income Tax Act 2007. This calculator tests all of them simultaneously: purpose of resale, dealer, developer, builder, minor subdivision, full scheme, rezoning, and bright-line. You need to pass every single one to avoid tax on a property sale.

Updated April 2026 Income Tax Act 2007 ss CB 6, CB 6A, CB 7, CB 8, CB 9, CB 12, CB 13, CB 14.

Property basics

Property type Acquisition date Sale date

Intention and use

At time of purchase, did you have any intention of selling? Section CB 6 - purpose of resale catches sales regardless of timeframe. Used as your main home?

Business / pattern tests

Are you (or an associated person) a property dealer? Are you (or associated person) a builder/developer? Did you erect a building on the land?

Subdivision / rezoning

Is this sale part of a subdivision or development? Was the land rezoned during your ownership? If rezoned: % of value uplift attributable to rezoning

Section CB 14 only catches if rezoning drove 20% or more of the uplift.

Financials

Purchase price + improvements

Sale price (after selling costs)

Your marginal tax rate

The eight land sale rules

s CB 6 - Purpose of resale: Intention-based, no time limit. Broadest provision.
s CB 6A - Bright-line test: 2 years for sales from 1 July 2024. Residential only.
s CB 7 - Land dealer: Business of dealing in land. All sales taxable, no holding period.
s CB 8 - Developer: Business of developing/dividing land. All sales taxable.
s CB 9 - Builder (10 years): Sales within 10 years of building work by you or associated persons.
s CB 12 - Minor subdivision (10 years): Subdivisions sold within 10 years with more-than-minor work.
s CB 13 - Subdivision scheme: Undertaking or scheme involving development. No time limit.
s CB 14 - Rezoning (10 years): Sales within 10 years of rezoning where rezoning drove 20%+ of value uplift.

What's NOT on this list

Farmland (mostly excluded from bright-line and residential rules). Business premises (excluded from bright-line but can be caught by dealer/purpose rules). Main home sales (excluded from bright-line, subdivision and rezoning rules under specific conditions). Shares in a company that owns land (different rules - "land-rich company" anti-avoidance). Overseas property owned by NZ tax residents (bright-line can still apply).

Sources

This is a screening tool only. Property sale tax is fact-specific and each provision has technical sub-tests, exclusions, and associated-person rules. Get professional tax advice before selling property where any of these rules might apply.

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