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IR9 Question 11 income from taxable sale/disposals of property

Include all income from land sales that are excluded from the residential property deduction rules (covered by question 10) Also include taxable sales of the main home or holiday homes taxed under the mixed-use asset rules. Tax losses from disposals of residential property are also included under this question.

The profits are taxable if you bought a property for the purpose of reselling it or are in the business of buying and selling land and/or buildings.

The profits may also be taxable if you:

  • are a builder and improved a property before selling it
  • developed or subdivided land and sold sections
  • had a change of zoning on your property and sold it within ten years of buying it.

The bright-line test needs to be considered when none of the other land sale rules apply to the disposal of the property.

If you purchased a residential property on or after 1 October 2015 and sold/disposed of it within a certain period of time, any profit will be taxable, even if you didn't intend to sell when you purchased it.

This is called the bright-line test. The bright-line test applies to:

  • properties purchased/acquired on or after 1 October 2015 through to 28 March 2018 inclusive and sold/ disposed of within two years, and
  • properties purchased/acquired on or after 29 March 2018 and sold within five years.

Net income from sales/disposals of most residential property is included in residential income in question 10 Box 10A.

Show the total profit from other property in Box 11.

If the property was taxable under the bright-line test and made a loss, any excess deductions cannot be claimed unless they can be offset against net income from other residential property sales.

For more information on property sales see our guide Buying and selling residential property - IR313.

Complete a Property sale information - IR833 for each property sold/disposed of and include it with your return. The form explains how to calculate and correctly return the resulting profit or loss. You can download the form from Complete the form even if the details have been included in a Financial statements summary - IR10 or set of accounts.

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