92% of lifestyle blocks will be hit with CGT

Stuff reports:

Lifestyle block owners may be in for a shock if the Capital Gains Tax goes ahead in 2021.
Under the recommendations of the Tax Working Group, land that is larger than 4,500 square metres will be subject to the tax.
There’s no mention lifestyle blocks will be exempt like family homes, or treated like farms, which allow for the house and surrounds to be left tax-free.
Real Estate Institute chief executive Bindi Norwell said the median size of lifestyle properties sold in New Zealand in the last 12 months is 20,000sqm.

On the basis of that data, she believes 92 per cent of lifestyle blocks sold across the country last year would be taxable.

So don’t believe the claim that the family home is exempt. Only some people will be exempt. If you have flatmates you won’t be exempt. If you use any part of it for a home office, you won’t be exempt. If you have a boarder (even adult children) you won’t be exempt. If you live on a lifestyle block you won’t be exempt. If you get any revenue from AirBnB you won’t be exempt.

Do not think the CGT will apply only to rental investment properties. It is far wider than that.

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