Bright Line Test Changes
February 05, 2024 at 11:06 AM
On 20 December 2023 the coalition government announced changes to the Bright Line Test.
This is what Nicola Willis had to say:
"Today I am announcing our immediate decision to bring the brightline test for residential property back to two years, effective from 1 July 2024. Removing this effective capital gains tax means that properties sold after 1 July 2024 will only be subject to the rule if owned for less than two years."
The Bright Line Test is currently set out as follows:
You have to pay tax on profits from the sale of a house if you bought it
- between 1 October 2015 and 29 March 2018, and sold it within two years
- between 29 March 2018 and 27 March 2021 and sell it within five years or
- on or after 27 March 2021 and sell it within 10 years (or five years for a new build).
Exclusions to this if it is a business premise, farmland or it is the main home.
Check out the IRD website for more details - link below.
At Mortgage Field, we are so pleased with the changes. It is fairer for genuine investors and returned to what it should had been intended for.
No further details have yet to be provided so watch this space.