Bright-line Announcement

On December 20, 2023 the new coalition government announced that the bright-line test will be reduced to two years from 1 July 2024

With mortgage interest rates reaching their peak, and the reduction in bright-line test from 5 to 2 years on new-builds, TOA Developments expects an uptick in enquiry from investors in their Kenepuru Landings development during the early stages of 2024.

This is what Nicola Willis had to say:

"Today I am announcing our immediate decision to bring the bright-line test for residential property back to two years, effective from 1 July 2024. Removing this effective capital gains tax means that properties sold after 1 July 2024 will only be subject to the rule if owned for less than two years."

A two-year timeframe is fairer for genuine investors, while still capturing those who are really traders but who would have liked to pose as ‘long-term investors’ in order to avoid paying tax on the capital gains they make. 

We expect the definition of “sale” will likely be a binding contract, but we need to wait for the detail to be confirmed.