What is the Bright-Line Test?

The Bright-Line Test is a rule in New Zealand that determines whether you need to pay tax on the profit made from selling a residential property. It applies if you sell the property within a set number of years after buying it.

How long do you need to hold a property to avoid the Bright-Line Test?

To avoid the Bright-Line Test, you need to hold the property for more than 2 years. If you sell the property within 2 years of purchasing it, you may be taxed on the profit.

Are there any exemptions to the Bright-Line Test?

Yes, there are exemptions to the Bright-Line Test, including the sale of the family home, inherited property, and properties transferred as part of a relationship property settlement.

How is the profit from a property sale taxed under the Bright-Line Test?

If the Bright-Line Test applies, the profit from the sale is taxed at your marginal income tax rate, and you must include this in your annual tax return to the IRD.

Bright line test calculator

Find out if you need to pay tax under the Bright Line test

Ok, now for the legal bit:

This calculator is for general information only. It’s not financial advice. See here for details about our Financial Advice Provider Disclosure. So Opes isn’t telling you what to do with your own money.

We’ve made every effort to make sure the calculator and its assumptions are reasonable and accurate. But calculators rely on estimates and inputs you provide, and the results won’t be right for everyone. Make sure you do your own research or talk to a financial adviser before making any investment decisions.

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Tax

Do I have to pay tax under the bright line test in NZ?

Discover the latest NZ Bright Line Test changes and how they impact property investors.