The new bright-line rule applies if you have bought a property on or after 27 March 2021 and sell it within ten years.
This has been extended from the previous 5-year rule to reduce the number of homes being sold and acquired by property investors and make everyday property purchases simpler for individuals.
For some home sellers, this might mean that they will need to pay income tax on their profits from the sale if it is within the bright-line period. It is important to note that there are several exceptions to the rule, including whether or not it was your main home, if it is a new build or if you inherited the property.
Determining what category you belong to might be difficult, but the property experts at Collins and May Law can help! So if you have any questions about this new rule, don’t hesitate to contact our team, who will be more than happy to offer their legal support.
Collins & May Law is a Wellington-based general practice law firm offering its services in property, trusts, employment, business and dispute resolution. The experienced legal team can support you in your legal matters and give specialist advice about any questions you might have. If you would like to find out more about the bright-line test and what it might mean for you, contact us now, and we will be happy to explain it further.
For more information, visit our website at https://collinsmay.co.nz/.