Luke Chemies

house prices going up.

Okay.

You have people deliberately saying that they're buying houses, hoping that they go up in value, that your intention is for them to gain from it, including rental properties.

And then they sell it and they're like, man, I banked a capital gain and they don't have to pay tax on it.

You go, well, hang on, we've got an overall intention rule and people are kind of outwardly saying, oh, I know that this rental property, say, isn't going to make me money.

So what is the intention?

Well, the intention is that it goes up in capital value and I make my money back then and then I don't have to pay tax on it.

Well, the intention...

was for it to go up in value and for you to profit from that because you're not profiting from the general income in, rent in, expenses out.

So therefore, we don't tax that.

So that's where, again, the interpretation of these tax rules and how they actually apply become strange.

But if we take it to probably where it is more commonly used, you might go, well, I bought a vehicle

and I intended to flick it on and make a profit, you've got an intention, then potentially, you know, again, potentially, you then have to pay tax on that.

And also property flippers, for instance, are buying properties, they're intending on making a profit from them, they will then get taxed on those.

They can't avoid that.

Now, for a lot of people, let's not even go further down that path.

Anyway, there's an intention rule in the country as well.

But let's get back to the hobby versus business.

So you intend to make a profit.

So that's what you're setting out to do.