New Zealand consults on GST treatment of residences supplied with other land

Summary 

• New Zealand Inland Revenue opened consultation on draft interpretation statement PUB00490 on 19 October 2026. Comments are due by 30 November 2026. 

• The draft explains sections 5(15) to 5(16C) of the Goods and Services Tax Act 1985 where a private residence forms part of a wider land supply. The residence may be deemed a separate supply requiring its own GST analysis. 

• The guidance addresses identification, valuation, taxable supply information, deemed taxable supplies and wash-up adjustments. Property owners should test mixed-use transactions before signing or settlement. 

Extended article 

New Zealand Inland Revenue has released a 47-page exposure draft dealing with one of the more difficult areas of GST on land: a transaction that includes both a private residence and other real property. The draft is intended to replace earlier guidance and is open for comment until 30 November 2026. 

Section 5(15) can treat the residential component as a separate supply from the remainder of the land. That separation matters because the components may not share the same GST treatment. The analysis can depend on whether the property was a principal residence, residential rental accommodation, acquired or used for taxable supplies, or previously obtained as a zero-rated supply. 

The draft also discusses how to identify and value the separate supplies, what taxable supply information is required and when the deemed-supply rules in sections 5(16) to 5(16C) apply. It addresses previous input tax deductions, zero-rated acquisitions, disposal or deregistration, anti-avoidance and wash-up adjustments. 

For taxpayers, the main risk is treating a mixed property transaction as a single undifferentiated supply. Sale agreements, valuations, historic deductions, use records and zero-rating documentation should be reviewed together. Parties should also align the contractual allocation with defensible market evidence rather than relying on an arbitrary split. 

External links: Inland Revenue consultation page | Exposure draft PUB00490 (PDF) 

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