If you want to invest in commercial property in New Zealand, it could definitely be the right thing for you to do – it can be highly lucrative – but that’s not to say it doesn’t come with some challenges to consider too, which is why research is so important. Let’s take a look at capital gains tax for a commercial property investment, for example, to help you get started.
What Is Capital Gains Tax?
Capital gains tax is simply a tax on the profit you make when you sell something, and a commercial property would fall into that category. Right now, there isn’t technically a capital gains tax in New Zealand like there is in other countries, but there are still rules to follow, when it comes to commercial property sales, taxation rules can be complex, so it’s wise to learn more about them.
How Capital Gains Tax Applies To Commercial Property
If you’re considering a commercial property investment, then it’s good to know that the tax you’ll pay on it is going to depend on a few different factors, including why you bought it in the first place, how long you’ve owned it for, and how the property was used. So if you bought the property intending to sell it for a profit, the gains you make could be considered taxable income. The same is true if you’re essentially in the business of buying and selling properties – your profits are probably going to be taxed.
How To Minimise Tax
To minimise the impact of capital gains tax on any commercial property investments, you’ll need to plan. That might mean holding into the property for longer than you intended (so the sale won’t be classified as income) perhaps taking advantage of the times when tax rates are lower or using losses from other investments to offset any gains you might make.
Contact NZ Commercial Property Brokers Today
As we said, it’s a complex subject, but don’t worry – that’s what we’re here for. Just get in touch with us today and we can help guide you through it all.
