What is the bright-line test in New Zealand?

The bright-line test taxes profit from selling certain residential property if the property is sold within a set period after purchase. It operates as a specific tax rule under the Income Tax Act, not a general capital gains tax. The gain is treated as taxable income in the year of sale.

How long is the bright-line period?

The period depends on when the property was purchased. Properties purchased on or after 27 March 2021 are subject to a 10-year rule (or 2 years for new builds). Properties purchased between 29 March 2018 and 26 March 2021 have a 5-year rule. Earlier purchases (from 1 October 2015) have a 2-year rule. Properties purchased before 1 October 2015 are not subject to the bright-line test.

Does the bright-line test apply to my main home?

There is an exemption for your main home. If the property was your primary residence for most of the time you owned it, the bright-line test generally does not apply. A change-of-use rule may result in a partial tax liability if the home was rented out for a period.

What are the NZ income tax rates?

For the 2024-25 year: 10.5% on income up to $14,000; 17.5% on $14,001–$48,000; 30% on $48,001–$70,000; 33% on $70,001–$180,000; and 39% on income over $180,000.

What counts as a new build for the 2-year rule?

A new build is a self-contained residential dwelling that has received a code compliance certificate on or after 27 March 2020, or is a relocated house that has been moved from another site. Purchasing a new build gives a reduced bright-line period of 2 years instead of 10 years.

Are there other property tax rules in NZ besides the bright-line test?

Yes. The intention test under the Income Tax Act can tax property gains even outside the bright-line period if you bought with the intention to resell. Residential properties are also subject to interest limitation rules. This calculator only covers the bright-line test.

New Zealand Capital Gains Tax (Bright-Line Test)

Name: New Zealand Capital Gains Tax (Bright-Line Test)
Availability: InStock
Author: Nham Vu

Enter purchase date, sale date, and prices to find out if the NZ bright-line test applies and estimate the income tax on your property gain.

Property Details

Purchase Date

Date you became the owner (settlement date).

Sale Date

Date of sale settlement.

Property Type

Existing property New build

New builds have a 2-year bright-line period (if purchased on or after 27 March 2021).

Purchase Price (NZD)

Cost base including purchase costs.

Sale Price (NZD)

Net proceeds after selling costs.

Other Taxable Income (NZD) (before this gain)

Salary, wages, rental income, etc. for the tax year of sale.

Enter property details and click Calculate

Bright-Line Result

Tax Owed

Effective Rate

Net Gain

NZ Marginal Income Tax Rates (2024-25)

Taxable Income (NZD)	Rate

Calculation Breakdown

Estimate only — applies NZ bright-line rules and 2024-25 marginal rates. Does not account for the main home exemption, change-of-use adjustments, losses, or the intention test. Seek advice from a tax professional for your specific situation.

Summary

Enter purchase date, sale date, and prices to find out if the NZ bright-line test applies and estimate the income tax on your property gain.

How it works

Enter the purchase date and sale date of the residential property.
Select whether the property is a new build (reduced 2-year bright-line period applies).
Enter the purchase price (cost base) and sale price (proceeds).
Enter your other taxable income for the year to determine your marginal rate.
The calculator determines which bright-line period applies and whether the sale falls inside it.
If the bright-line test applies, the gain is added to your income and taxed at your NZ marginal rate.

Use cases

Check if selling a rental property triggers the NZ bright-line tax.
Estimate income tax owed before listing a residential investment property.
Compare the tax cost of selling now versus holding until the bright-line period expires.
Understand the difference between the 2-year, 5-year, and 10-year bright-line periods.
Model after-tax proceeds from a property sale at different marginal income tax rates.
Plan the timing of a property sale to minimize tax under the bright-line rules.

Frequently Asked Questions

Last updated: 2026-07-24 · Reviewed by Nham Vu