Changes to the Bright-line property rule

From on 1 July 2024, the bright-line property rule will change.

If you sell a property on or after 1 July 2024 the bright-line property rule will only apply if the property is sold within 2 years of purchasing it.

If you sell a property before 1 July 2024, the current bright-line periods still apply.

• If you bought the property between 29 March 2018 and 26 March 2021, the bright-line property rule applies if you sell the property within 5 years of buying it.
• If you bought the property on or after 27 March 2021, the bright-line property rule applies if you sell the property within 5 years for qualifying new builds or within 10 years for other residential property.

Example 1.

Maria purchased a rental property on 20 March 2021, and she sells the property before 30 June 2024; the 5-year bright-line rule applies; therefore, she will need to pay tax on the gain on disposal of the property.

If Maria sells the property a day later, 1 July 2024, the 2 years of bright-line rule applies and because she purchased the property longer than 3 years, she does not need to pay tax on the gain.

For further assistance, please feel free to contact us.

The information contained within this website is provided for information purposes only and is not intended to substitute for obtaining accounting tax or financial advice from a professional accountant.