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Changes to Property Tax Rules

The New Bright-Line Test

What’s changing?

The new bright-line rule applies to agreements for sale and purchase of residential property entered into on or after 1 October 2015. It requires people who sell residential property within two years of buying it to pay income tax on the sale, unless:

•   It’s their main home;
•   They inherited the property; or
•   They receive a property as a part of a relationship settlement.

All existing property tax rules, for example the intention test, still apply. The bright-line rule only applies to residential property. Business premises and farmland are not subject to this rule.

The IRD has created a webpage for people who buy, sell or transfer property. It covers all property changes that apply from 1 October 2015, including the new bright-line rule.