The following is a record of questions and answers at our webinar Interest limitation & bright-line extension: insights from the IRD part 2.
See the presentation video below:
Q. In the Special Report there is an example of converting one house into two self-contained apartments (pg. 81) the resulting two are then both considered new builds – can you provide more information on this? Does there need to be significant work done on both? a CCC issued covering both? When is the original considered not a new build, i.e. adding a minor dwelling to a property, the original property wouldn’t be considered a new build, however, what if the minor dwelling was attached, i.e. underneath the existing house, or the original (attached) garage?
A. A CCC certificate covering both residential units created by the conversion is required for each of the units to be a new build. (DH 5(7)(a)) Also each apartment would need to be a new build as defined as a self-contained residence that receives a CCC confirming the residence was added to the land or converted into a residence on or after 27 March 2020. The CCC is the requirement rather than any measure of ‘significance’
Q. What happens if you leave your home for 12 months to travel overseas – and don’t have another main home during that time. If you then sell within 10 years do you need to pay tax on the period you were away?
A. If they don’t have another main home while away, then their home in NZ could still potentially be their main home for the purposes of bright line. But that is very dependent on facts. We are doing more work on this very issue and will be providing guidance. The...
