Rurawhe Adrian; Bayly Andrew; Parker DavidPart 2 Amendments to Income Tax Act 2007 CHAIRPERSON (Adrian Rurawhe): Members we come now to the debate on Part 2. This is the debate on clauses 4 to 65 and Schedules 1 and 2 containing amendments to the Income Tax Act 2007. The question is that Part 2 stand part. ANDREW BAYLY (National—Port Waikato): Thank you Mr Chair. Well this is quite a big part of the bill and there's a lot to be discussed in this. First of all the rules around the main home exclusion for disposal within five years—it would be useful to have Minister Parker just help us work our way through what the exclusions are. As I understand it there are three exclusions in respect of the brightline test which no doubt we're going to talk more about today through Supplementary Order Paper 23. But in terms of the exclusions for the brightline test one is if it's your main home and I see there are rule changes around that now it can be proportioned depending on how often you are in that home. Also you can chop back and forth between specified homes and come back to it but you've got a maximum of two over a certain period of time. The second aspect relates to if you inherit property from family—for instance a parent or whatever. If you're inheriting property you are excluded as well as if you have a marriage breakdown and therefore you may have received the matrimonial home as part of a settlement and you may choose to sell that because you're in a difficult financial situation. I think that the second two are pretty easy concepts to understand. The definition around land though has been extended from my reading of it. I'm just going a little bit from memory here but it is land that currently has a dwelling on it; land where there's a commitment to put a dwelling on it; and thirdly land that is permitted to have a dwelling able to be built on it according to the local government rules—how it's been zoned. So that third category is a fascinating category. That means if you own a piece of bare land and your current use is as a farm or ranging livestock or drystock or whatever if it's been rezoned not of your making but because the council's passed a unitary plan change or there's been a specific requirement and the council's passed a specific plan change for a certain area—even though you may have not been party to that—are you in fact now captured by this and therefore vacant land becomes caught under these rules? That would then make many people very nervous in any outlying area of a city where the boundaries aren't clear—there may even be a metropolitan urban limit put in place but the council may choose to extend it beyond that or maybe inside the fringe so we're all urban zoned. So I'm very keen to understand what exactly is that definition around land that is permitted as a result of a plan change or whatever—and also that first definition around the home would be very good to get some clarification around.Hon DAVID PARKER (Minister of Revenue): As far as I understand the member's description in respect of inherited properties and properties sold as a consequence of a relationship breakdown it is as the member has described and I'm sure officials will correct me if I've got that wrong. And in respect of the issue that the member refers to in respect of vacant land I will take some advice from officials and respond a little later.