Brightline Changes from 1 July 2024
π Important Update from the IRD on Bright-line Property Rules π
Starting 1 July 2024, significant changes are coming to the bright-line property rule. Here's what you need to know:
ποΈ Key Date to Remember:
β From 1 July 2024, the bright-line property rule applies only if you sell a property within 2 years of purchasing it.
π
Selling Before 1 July 2024:
The current bright-line periods still apply:
β Properties bought between 29 March 2018 and 26 March 2021: Bright-line period is 5 years.
β Properties bought on or after 27 March 2021: Bright-line period is 5 years for qualifying new builds and 10 years for other residential properties.
π‘ Selling Your Main Home:
The bright-line property rule generally does not apply if you sell your main home. This remains unchanged, but the criteria are specific:
β More than 50% of the property's area must be used as your main home.
β The property must be used as your main home for more than 50% of the time you owned it.
β If you build on the land, the construction period does not count towards determining your usage for the main home exclusion.
π New Rollover Relief Rules for Associated Persons:
β The rollover relief rules are extended to cover transactions between associated persons:
β Includes associated companies, relatives (within 2 degrees of relationship), trusts and their beneficiaries, partners and partnerships, and look-through companies and their owners.
β Both the transferor and transferee must be associated for 2 years before the transfer.
β Rollover relief can be claimed once in any 2-year period.
For specific accounting or taxation advice, please contact your accountant.
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