Buying guide
Brightline test explained
Everything you need to know about New Zealand’s capital gains tax
AI summary
New Zealand's brightline test taxes profits from selling residential property within two years. As of July 1, 2024, this two-year period applies to all properties, with the profit taxed at your marginal income tax rate.
Key exemptions include:
- Your main home
- Inherited property
- Relationship property settlements
However, the IRD can still tax gains if it identifies a pattern of buying and selling for profit. Given the rules' complexity, always seek advice from a tax accountant before selling.
What is the brightline test?
Why the NZ brightline tax was introduced
The family home is usually not covered by the brightline, unless it's been rented out.
Exceptions to the brightline test
Your main home
Inherited real estate
Relationship property
Your capital gains may be taxed if:
You’re in a pattern of buying and selling property for profit
You’re a builder or property developer
You’ve rented out your main home
The bigger the gain, the higher the tax.
You’ve sold the property to an entity
How to work out how much you’ll be taxed
Get expert advice from a tax accountant
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