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 residential properties bought and sold within a two-year period. Effective from 1 July 2024, this rule applies to all properties, with the profit taxed at your marginal income tax rate.
Key exemptions from the test include:
- Your main home
- Inherited property
- Relationship property settlements
However, the main home exemption may not apply if you have a pattern of frequent trading or rent out over 50% of the property.
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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