Bright-line test
The bright-line test is an income-tax rule that taxes the profit on a residential property sold within a set period of buying it — currently two years for properties bought on or after 1 July 2024.
If you sell a residential investment property within the bright-line period, the gain is taxable income at your marginal tax rate. The main home is generally excluded, as are inherited properties and relationship-property transfers.
The period has changed several times: it was 10 years (or 5 for new builds) for properties bought between March 2021 and June 2024, and reverted to 2 years for purchases from 1 July 2024. The date you entered into the agreement matters, so check which rules apply to your purchase.
Source: IRD — the bright-line test
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