When you may have to pay tax selling a property

When the bright-line test commenced, it affected residential land bought and sold from 1 October 2015. If you sold the property within a two-year period, then depending upon your circumstances residential land tax may have applied.

From 29 March 2018, the two-year period has increased to five years.

Tax may become payable if you have bought property with the intention to re-sell it and the tax paid would be based on any profit you make when it is sold.

Although the bright-line test may not apply when selling the property after the five year period has lapsed, tax may still be payable if the intention test is applied.

Residential land withholding tax will apply to the sale of your property if it is residential land, sold within five years from 29 March 2018, or you are an person buying from offshore. For more details refer to https://www.ird.govt.nz/property/brightline-qa.html

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Kirralee Fisher

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