Propertyscouts Dunedin

Bright-Line Test (IRD) - 1st Oct 2015

Bright-line test commences 1 October 2015: The purpose of the bright-line test is to help IRD determine whether the ‘profit’ from the sale of a property should be treated as taxable income (capital gains tax in other words). Up until now the ‘test’ has always been the purchasers ‘intent’ at the time of purchasing a property. From today all residential property (except owner occupied) which is sold within two years of purchase will generally be subject to capital gains tax. We think this will really only be an issue for speculators and that most of our landlords realise the benefits of being in property for the long haul.

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