a paper crafted house sitting amongst ferns and moss, with text on the left reading a paper crafted house sitting amongst ferns and moss, with text on the left reading a paper crafted house sitting amongst ferns and moss, with text on the left reading

Buying or selling property? Make sure you know about the bright-line rule

What is the bright-line property rule?

The bright-line property rule means that people who sell a residential property might need to pay income tax on any gains.

How it works depends on when you bought the property.

Purchased before 1 October 2015

If you purchased the property before 1 October 2015, the bright-line property rule does not apply.

Purchased between 1 October 2015 and 28 March 2018

If you purchased the property between 1 October 2015 and 28 March 2018, the bright-line property rule may apply if you sell it within two years of buying.

If the property is your family/main home, you inherited the property, or if you're the executor or administrator of a deceased estate, the bright-line rule does not apply.

Purchased on or after 29 March 2018

If you purchased the property on or after 29 March 2018, the bright-line property rule may apply if you sell it within five years of buying.

If the property is your family/main home, you inherited the property, or if you're the executor or administrator of a deceased estate, the bright-line rule does not apply.

Exclusions

There are three exclusions:

The bright-line rule does not replace existing property tax rules. You might still need to pay tax on your property profits even if the bright-line rule does not apply.

My obligations

If you sell a property that falls under the bright-line rule, then you'll need to complete an income tax return and a Property sale information form - IR833 at the end of the tax year. If you have a tax agent, they'll be able to help.

Learn more about how to file an income tax return on our website.


Bright-line rule Q&As

Find out more about the bright-line property rule, including exemptions that might apply


Property and tax

Find out everything you need to know about residential property and tax


Read the full legislation

Read the full Taxation (Bright-Line Test for Residential Land) Act 2015