The “Bright-Line Test”, or period in which profit made from the sale of residential land is taxable as income, has been extended from two to five years. The five year period applies to properties purchased from 29 March 2018 onwards.
The Bright-Line Test does not apply to the family home; however, investors and multiple property owners who intend to sell a property within five years of purchasing should be aware that they may face a substantial tax bill upon sale.
The extension was introduced in order to dampen residential property speculation, by taxing profit on residential property transactions.
It is important that we understand what your intentions are when buying and selling properties. You should discuss this with us before you commit to any sale or purchase agreement.
For further information, please contact Partner Andrew Logan (DDI 03 343 8452 / email@example.com).