#1 – The bright-line test means investors pay less tax
The bright line test makes investors pay tax on their capital gains (depending on when they sell).
But from Monday, you only pay tax if you sell within 2 years of buying a property.
No more 5-year rules for some people and 10-year rules for others.
So, if you bought before July 2022, you probably don’t have to worry about the bright line anymore.
This makes a big difference. If you bought the average Christchurch property in March 2020, you would have paid $514,000.
Today, the average house is worth $762k.
So you could sell and make $248k worth of gains.
But, if you sold on Sunday, you’d have to pay $81.9k to the IRD.
But if you sell today, you pay them nothing.
