Tighter Rules Welcomed

property_jpgThe recent Government initiative to apply a two year rule on homes sold within two years of purchase by non owner occupiers is welcomed by property investors.

Andrew King of the Property Investors Federation has represented property investors nationwide in the press and on TV recently. He confirmed what we’ve been saying on PropertyTalk for some time. It’s Property Traders who are turning over property quick smart to make a profit and they are not your typical property investor. Property investors have a different focus to Traders. They prefer to buy property to rent out to tenants. The ongoing yield from the investment is the property investor’s focus and of course this ceases to exist if the investment is sold!

The two year selling rule – may catch the odd Trader out. However it’s less likely to be the Traders who buy and sell multiple properties regularly. PropertyTutors mentor investors in the strategy of trading. PM John Key when on the Breakfast TV show one morning mentioned Sean Wood’s appearance on TV One News a few days earlier as an example of traders the new rule may catch out. In reality however it’s less likely given the extensive ground work PropertyTutors have done over the years so their clients understand the CGT rules for Trading which as we know has been around for years. Therefore for them it’s more than likely going to be ‘business as usual’.

The new rule imposes a capital gains tax on all properties (not lived in by the home owner) that are brought and sold again within two years. Within this period it is now deemed the intention of the property owner to make a quick profit when they sell. The IRD will also be given more funds to chase offenders and before long we’ll know how many were caught under this tighter rule.


This blog article was written for PropertyBlogs by Mobilize Mail.

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