Yesterday the government announced significant changes to the Brightline Test. Whether this affects the way that property investors and landlords manage their investment portfolio remains to be seen. Traditionally, investors take a long-term view, particularly those who invest in property, so the additional 5 year wait may not be significant to most.
It’s more likely that those that will be affected by the changes the most are not the speculators, but rather home owners that are forced to sell their properties out of necessity, like health reasons, retirement or hardship, i.e. those that are most deserving of a good return on their investment.
The changes may also affect owner occupiers. Even if the home is the “owners main home”, which would usually be exempt from “paying income tax on any profit made through the property increasing in value” the owner may have to pay tax if the property is rented, even if it’s only for a short period of time.
There will be confusion, and we recommend speaking to your accountant or financial adviser. In the meantime, have a look at this document from the IRD covering the new Brightline Test rules.
For more information contact Frank Rangi at Metro NZ Properties: Phone 021 642 119 or firstname.lastname@example.org.