Property investors come in all shapes and sizes, from large scale professional operations and developers to so-called ‘Mum and Dad’ investors who wanted to save for their retirement with something they could feel was literally safe as houses.

For properties purchased on or after 27 March 2021:

• the bright-line test was extended from 5 to 10 years, except for new builds, where the test period is still 5 years
• the bright-line test exemption for the main home changed, making them subject to a ‘change of use’ rule

From 1 October 2021, property owners are not able to claim mortgage interest deductions on residential investment property acquired after 27 March 2021, and mortgage interest deductions for residential investment property acquired earlier will be phased out over the following four years

Inland Revenue issue bright-line campaign letters. As soon as they are aware of a potential bright-line transaction, usually within a month of the transaction, they’ll get in touch to give an early heads-up of any possible tax obligations.

If you’re planning to buy or sell property, please contact us so we can look at the tax implications with you.

DOWNLOAD THE GUIDE ON RESIDENTIAL PROPERTY - THE BRIGHT-LINE TEST AND TAX