Brightline Test Calculator

The brightline test is an NZ tax rule that makes profit from selling residential property taxable if you sell within the brightline period. If you sell on or after 1 July 2024, the period is a uniform 2 years regardless of when you purchased. If you sell before 1 July 2024, the period instead depends on your purchase-date cohort (2, 5, or 10 years).

IRD confirms that for property sold on or after 1 July 2024, the brightline period is a uniform 2 years from the date title was registered to you (usually settlement) to the date you sign the sale agreement — this applies to EVERY sale from that date, regardless of when the property was bought, even if it was bought under the old 5-year or 10-year rules. Only sales agreed before 1 July 2024 use the older purchase-date cohorts: bought 27 March 2021 – 30 June 2024 (10 years, or 5 years for a new build bought within 12 months of it becoming new build land), or bought 29 March 2018 – 26 March 2021 (5 years).

The main exclusions are: your main home (the land has been used predominantly, for most of the bright-line period, for a dwelling that was your main home; IRD applies this as more than half of the property's area and more than half of the bright-line period; the exclusion does not apply if you have used it twice within the 2 years immediately before the bright-line end date, or have engaged in a regular pattern of acquiring and disposing of main homes, section CB 16A(3); a trustee can also use it for land that was the main home of a beneficiary of the trust, if a principal settlor has no main home or the settlor's main home is that land, section CB 16A(1)(b)), business premises and farmland. Inherited property is outside the test too: the transfer on death and a later disposal by the executor, administrator or beneficiary are not taxed under section CB 6A, though sections CB 6 to CB 12 can still apply. Rollover relief is different, because it defers the tax rather than removing it: it covers relationship property agreements, transfers between associated persons, and transfers to a trustee where all beneficiaries are associated with the transferor or are charities.

If the brightline test applies, your gain (sale price minus purchase price minus eligible costs) is added to your taxable income and taxed at your marginal income tax rate. NZ income tax rates range from 10.5% to 39%.

Yes, for properties purchased between 27 March 2021 and 30 June 2024 and sold before 1 July 2024, a new build bought no later than 12 months after it became new build land had a 5-year brightline period instead of 10 years. A new build bought later than that used the 10-year period: that follows IRD's published position, because a literal reading of the Income Tax Act 2007 s CB 6A(1) as at 30 June 2024 puts it in neither the 10-year nor the 5-year class. From 1 July 2024 the 2-year test covers every disposal, new build or not, so this matters only for sales before that date.