The Taxation (Bright-Line Test for Residential Land) Act 2015, took effect from 1 October 2015.
The changes mean that if you buy and sell residential property within two years after 1 October 2015 any gains made during that period may be taxable.
There are some exceptions. The new rules won’t apply to your main home, i.e. the home that is used as the principal place of residence by you or your family unless:
- you fit the definition of an offshore person (includes a NZ citizen who has not been in the country in the 3 years prior to the sale);
- you have multiple main home sales within two years (2 or more sales);
- you are a principal settlor or a beneficiary of a Trust owned property which is your main home;
- the transfer of the property follows the death of an executor, administrator or beneficiary;
- the property is transferred under a relationship property agreement where the relationship has broken down.
If you are concerned that the changes may affect you or want to discuss the consequences of your purchase before you commit please contact Grant Smith or Jim Eddy.