Enhanced Tool To Help With Property Tax Rules

Inland Revenue is encouraging people to check out our updated property tax decision tool.

This tool helps to work out whether the sale of a property is taxable under any of the land taxing rules, including the bright-line test.

If someone sells a residential property the bright-line test taxes any profit if it is sold within a set period of time i.e. the bright-line period, unless an exclusion or rollover relief apply.

Generally, the bright-line test does not apply to the sale of a person’s main home. This has not changed but the criteria has changed.

The bright-line test changed on 1 July 2024. If a property is sold on or after 1 July 2024, the bright-line test looks at whether the bright-line end date is within 2 years of the bright-line start date.

The bright-line test can be confusing with many factors to work out, such as determining those start and end dates.

A campaign to tell customers about the changes and where to find more information has started.

The tool can be found on our website at Buying and selling property (ird.govt.nz) and takes approximately 7 minutes to complete. The outcomes link to resources and can be printed out.

Inland Revenue’s next focus in the property area is speculators, those who frequently buy and sell property, to ensure they are complying with the tax rules.

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