If you’re about to buy a rental property or holiday home, sit up and pay attention.
Yesterday (27 March) Parliament passed legislation that extends the “bright-line” test from two to five years. This means that if you sell a residential property (family home excluded) within five years of acquisition, you will be taxed on the proceeds, regardless of your intention when you purchased it.
Aside from extending the bright-line period from two years to five, nothing else has changed. The three exceptions (main home, inherited land and relationship property transfers) still apply.
The five-year rule applies to all residential property acquired from the date of the Royal Assent. We expect the Governor-General to assent to the legislation over the coming week.
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