Millions of New Zealanders sell on TradeMe, Facebook Marketplace, Etsy, and other platforms. Most casual sellers have nothing to worry about — but if you are selling regularly with a profit motive, IRD expects you to declare the income. The line between a tax-free hobby and a taxable business is not always obvious.
Selling your own used personal items (second-hand clothes, old appliances, books) is generally not taxable — you are selling at below your original cost. But if you buy goods to resell at a profit, make things to sell, or trade regularly with the intention of making money, that income is taxable. There is no specific dollar threshold — IRD looks at your pattern of behaviour and profit motive. If you genuinely run a selling business, register for GST once you exceed $60,000 turnover.
The Key Test: Profit Intention
New Zealand has no capital gains tax on most assets — but it does tax income from a business or profit-making undertaking. The question IRD asks is not “how much did you sell?” but “why were you selling?”
Factors IRD considers:
| Factor | Points toward taxable business |
|---|---|
| Frequency and regularity | Selling every week, not once a year |
| Profit motive | You buy low and sell high intentionally |
| Business-like approach | Track inventory, set prices strategically |
| Nature of activities | Sourcing, manufacturing, or flipping goods |
| Volume | Hundreds of listings, multiple items simultaneously |
| Prior history of similar activities | Pattern of trading behaviour |
| Duration | Ongoing activity vs isolated sales |
No single factor is decisive. IRD looks at the overall picture.
Clearly Not Taxable: Casual Personal Sales
Selling personal items you already owned is generally not taxable:
- Clothes you no longer wear
- Electronics you replaced with newer models
- Furniture when downsizing or moving
- Books, DVDs, toys from your home
Reason: You originally bought these for personal use, not to resell. You are typically selling below what you paid. There is no profit motive — just decluttering.
Clearly Taxable: Trading and Reselling
These activities are taxable income:
- Buying goods cheaply and reselling at a profit (TradeMe “flipping”)
- Buying in bulk from suppliers or overseas (AliExpress, Alibaba, US wholesale) and selling retail
- Making items to sell (Etsy handmade goods, crafts)
- Buying cars, bikes, or vehicles to restore and sell
- Dropshipping
These are business activities. The profits must be declared in your IR3 or on your company’s tax return.
The Grey Area: Hobbyists Who Make a Profit
Example: A knitter who makes items as a hobby and occasionally sells some on Etsy. Not seeking to maximise profit, just recovering costs.
IRD’s position: If you are not carrying on a business systematically and with a genuine profit intention, hobby income may not be taxable. But:
- If you are regularly selling and making a consistent profit, IRD may view it as a business
- There is no hobby income exemption in NZ law (unlike some other countries)
- IRD assesses the facts of each case
Safe approach: If you are consistently making money selling online and it feels like a business, treat it as taxable. The risk of IRD reclassifying undeclared income as taxable is real.
GST and Online Selling
If your total online sales (and any other business income) exceed $60,000 in any 12-month period, you must register for GST:
- Charge 15% GST on your sales
- Claim back GST on business purchases
- File GST returns quarterly or 2-monthly
Most casual sellers stay well under $60,000. If you are a serious trader, this threshold applies.
Overseas Platforms (Etsy, eBay, Amazon)
If you sell through an overseas marketplace platform to overseas buyers, those sales may be zero-rated for GST (goods physically exported from NZ). Goods sold to NZ buyers through overseas platforms are still taxable supplies.
Platform Reporting — IRD Has Access to Data
From 2024, NZ is part of an OECD framework requiring digital platforms to report seller income to tax authorities (the OECD Model Rules for Reporting by Platform Operators). This means:
- TradeMe, Airbnb, and other platforms may report seller/host earnings to IRD
- IRD can cross-reference declared income against platform data
- Under-declaring online income is increasingly detectable
Expenses You Can Claim
If your online selling is a taxable business, you can claim:
- Cost of goods sold (what you paid for items you resell)
- Platform fees (TradeMe listing fees, Etsy fees)
- Packaging and postage
- Photography equipment (if used for product photos)
- Portion of home internet and phone
- Shipping software subscriptions
You cannot claim the original purchase price of personal items you are decluttering (those aren’t business expenses — they were personal purchases).
Frequently Asked Questions
I sold my car collection on TradeMe. Is that taxable?
It depends on your purpose for acquiring the cars. If you collected them as a hobby and sell them later, generally not taxable. If you bought them with the intention of reselling at a profit (or flip cars regularly), the profit is taxable.
I made $15,000 flipping goods on TradeMe. What do I do?
Declare it in your IR3 as self-employment income. You can deduct the cost of goods sold and business expenses. Pay income tax on the net profit. If this is ongoing, consider registering for GST if you approach the $60,000 threshold.
I sell handmade items on Etsy — do I pay tax?
If you consistently make a profit and it is an ongoing activity, yes — this is taxable business income. Claim your materials, platform fees, and postage costs as deductions.
Does TradeMe report my sales to IRD?
Increasingly, yes — under new platform reporting rules. IRD can also match bank deposits to unexplained income sources. Declare income you know to be taxable rather than hoping IRD won’t find it.