New Zealand: Residential property, “bright-line” test for holding period

New Zealand: "Bright-line” bill, residential property

The government introduced a tax bill that contains a “bright-line test” with respect to the tax on the disposition of residential land (other than a taxpayer’s main home) when bought and sold within two years. The bright-line test legislation has a number of features, including the ring-fencing of losses and potential restrictions on deductibility.


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The bright-line test proposal was announced in the budget for 2015, along with proposals for (1) disclosure requirements for collection of the IRD taxpayer identification numbers of the buyers and sellers; and (2) withholding tax for non-resident sellers.

Draft legislation on the disclosure requirements was introduced in June 2015, and has recently been through Parliamentary Select Committee scrutiny.

Both the disclosure requirements and bright-line test measures are to be effective from 1 October 2015 (thus, adding pressure for quick completion of the legislative process). A withholding system for non-residents is still under consideration. 


Read an August 2015 report [PDF 484 KB] prepared by the KPMG member firm in New Zealand: Property bright-line test legislation introduced

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