NZ Bright-Line Test 2026 Calculator — 2-Year Property Tax
Check whether your NZ property sale falls within the Bright-Line Test (2-year rule from 1 July 2024) and calculate the capital gain tax at your marginal income tax rate.
2-Year Rule Effective July 2024
Government cut the Bright-Line Test from 10 years back to 2 years for sales after 1 July 2024. Sell residential property within 2 years of purchase and the capital gain is taxable at your marginal income tax rate (up to 39%).
Main Home Exclusion
If the property was your main home for more than 50% of the ownership period, no Bright-Line tax applies. Mixed-use (rented part of the time) means partial exclusion proportional to days used as main home.
When the Clock Starts
For most cases, the clock starts on the date legal title transfers (settlement). For pre-build/off-the-plan, clock starts on settlement of completed property, not contract signing. Plan timing if selling close to the 2-year mark.
Tax Calculation
Capital gain = sale price minus purchase price minus eligible expenses (legal, agent, improvements). Then tax at your marginal rate (10.5% to 39%). Loss is generally NOT deductible (ring-fenced to future bright-line gains).
Source: ird.govt.nz Bright-Line Test changes 1 July 2024. Last updated: May 2026.
Frequently Asked Questions
When did the 2-year rule start?
1 July 2024. Properties acquired before this date follow the prior 10-year rule (in effect since March 2021); pre-2021 acquisitions fall under earlier 5-year and 2-year regimes depending on date.
Does subdividing trigger Bright-Line?
Yes if the subdivision happens within the original 2-year window and the new lots are sold. Inherited/devised properties usually have a separate 'rollover' relief — check with IR or accountant.
Can I deduct a Bright-Line loss?
Generally no — losses are ring-fenced to be deducted only against future Bright-Line gains, not against other income.
What about commercial property?
Bright-Line only applies to residential property. Commercial sales follow standard income-tax rules (taxable if held on revenue account, exempt if capital account).
Is my data private?
Yes. All calculations run in your browser. Inputs are never sent, stored, or shared.