Big IdeasBright Line Test Extended - Residential Property Sales
15 March 2018
“The extension of the previous government’s bright-line test will help dampen property speculation and make homes more affordable,” - Stuart Nash
Revenue Minister Stuart Nash has confirmed the bright-line test on residential property sales will be extended from two years to five years. Right now (with some exceptions like your family home), income tax must be paid on any gains from residential property sold within two years of acquisition. The extension means that profits from residential investment properties bought and sold within five years will generally be taxable.
To make this happen, changes to the law are currently making their way through Parliament. It is expected these will receive Royal Assent in March and that this will affect properties acquired on or after the date of Royal Assent.
We will have more for you on this when the legislation passes. Meanwhile, if you are in the process of entering into sale and purchase agreements to acquire property, please give us a call to discuss the tax implications.Back to Big Ideas