Paying income tax on profits from property sales

Some circumstances mean you may need to include profits you make from selling property in your taxable income. Income earned from property sales is like any other income. You must pay income tax on it.

Whether your profits from selling property are treated as income will depend on your intention when you bought the property, and on whether you or someone associated with you, is in the business of dealing in, developing or subdividing land, or in building. There are special rules for people in these businesses.

If one of your intentions for buying a property was to resell it, the profit is likely to be taxable. If you bought a property to provide a family home, any gain from the eventual resale will most likely not be taxable, unless you have a history of buying and selling your family home.

Read our Buying and selling residential property (IR313) guide to help you to understand whether you should be paying tax when you sell a property. The guide will help you decide whether you need to get more information or professional advice.

Whether your profits from selling property are treated as income will depend on your intention when you bought the property, and on whether you or someone associated with you is in the business of dealing in, developing or subdividing land, or in building. There are special rules for people in these businesses.

If one of your intentions for buying a property was to resell it, the profit is likely to be taxable.

If you bought a property to provide a family home, any gain from the eventual resale will most likely not be taxable, unless you have a history of buying and selling your family home.

Date published: 19 Feb 2009

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