The lifestyle block is becoming as popular in New Zealand as the quarter-acre dream.
I see more and more clients looking to buy lifestyle blocks - properties of about four or six hectares, with paddocks and fences plus the usual house and garage. Sometimes it's a working farm and a second source of income, other times it's just to live somewhere with space for animals and the family.
But there is GST to consider - does it apply to the purchase? Do you pay it, or can you claim it back on the land value?
It depends on the intention. If you're buying to work a business such as a farm, then this is a taxable activity. If you are buying only to live on the block and have a couple of chickens and a horse for the kids, then this falls outside the scope of being a business.
If you're not buying it as a business, and the lifestyle block has been registered for GST, you may have to pay an extra 15 per cent on the purchase price. Compulsory Zero Rating is a term that may be thrown around during the buy-sell process.