What do bright-line test rules mean for those buying residential homes?
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The bright-line property rule means that people who sell a residential property within a set period after acquiring it may need to pay income tax on the profit made. The Government has recently announced an extension of the bright-line period from 5 years to 10 years. 
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This means if you sell a residential property acquired after 27 March 2021 within ten years of acquiring the property, you may be required to pay income tax on the profit.
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There are some exceptions. The ‘main home’ exclusion test can be used when the home being sold has been used as a main home for the whole bright-line period. Inherited property will continue to be exempt from the bright-line rules. The Government has also indicated that it intends that new builds will continue to be subject to a 5-year bright-line period.
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Different rules will apply depending on when you purchased your property.  We can assist with checking dates to confirm the applicable bright-line period, and completing the Land Transfer Tax Statement for the IRD to ensure you are meeting your property tax obligations.