Property dealers, developers and builders

You’ll probably need to pay tax on any profit from a property sale if you’re a dealer, developer or builder, or otherwise involved in the property business.

Buying as part of your business

If you buy property as part of your property or construction business, you’ll need to pay tax on any profit when you sell it. This applies no matter how long your business owns the property.

Buying outside your business

If you buy property while you’re in the property or construction business, you may need to pay tax if you sell it, even if you bought it outside your business. For example, you bought a property under your own name while you were also in business as a property developer.

This depends on when you sell it and what kind of business you’re in.

The 10-year rule if you're dealing, developing or subdividing property

Generally, you’ll have to pay tax on your profits from selling a property if both of the following apply.

• At the time you bought the property, you, or someone you were associated with, was in the business of dealing, developing or subdividing property.
• You sold it within 10 years of buying it.

The 10-year rule for builders

Generally, you’ll have to pay tax on your profits from selling a property if both of the following apply.

• When improvements began on the property, you, or someone you were associated with, was in the building business.
• You sold the property within 10 years of completing improvements on it.

When the 10-year rule does not apply

The 10-year rule does not apply in any of the following situations.

• The property is your main home.
• You used the property in your business, but not as a rental.
• You're an employee of a property dealer, developer or builder, not in business yourself.
• You're no longer in the property business when you buy the property, or you bought it before you went into business.
• You're associated to a property developer at the time you acquired the property and after partitioning a subdivision there was no substantive change in ownership.

Associated with the property business

If you're associated with someone in the property business, you may have to pay tax on all or some of your property transactions, even if you're not personally a property dealer, developer or builder.

Associated with a property dealer, developer or builder

Property affected by weather events

The land time-related tests do not tax properties affected by a North Island adverse wetather event purchased by a Crown or local authority.

January and February 2023 weather events

Get advice

If you’re in the property business or associated with someone who is, we recommend you speak with a tax or legal professional to find out how these rules apply to you.