Property investor taxes

What taxes do property investors need to pay?

Bright line test

Do I have to pay tax under the bright line test in NZ?

Property Investment

Use this calculator to find out if you need to pay tax under the Bright Line test and get an estimate of the amount you may owe

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Bright line test calculator

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Bright line test calculator NZ (2024)

What is the Bright-Line Test?

The <a href="https://www.opespartners.co.nz/tax/bright-line">Bright-Line Test</a> is a rule in New Zealand that determines whether you need to pay tax on the profit made from selling a residential property. It applies if you sell the property within a set number of years after buying it.

How long do you need to hold a property to avoid the Bright-Line Test?

To avoid the Bright-Line Test, you need to hold the property for more than 2 years. If you sell the property within 2 years of purchasing it, you may be taxed on the profit.

Are there any exemptions to the Bright-Line Test?

Yes, there are exemptions to the Bright-Line Test, including the sale of the family home, inherited property, and properties transferred as part of a relationship property settlement.

How is the profit from a property sale taxed under the Bright-Line Test?

If the Bright-Line Test applies, the profit from the sale is taxed at your marginal income tax rate, and you must include this in your annual tax return to the IRD.