The 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 bright-line rule.