Bright-Line Test Calculator 2025/26
Check if your property sale is within the bright-line period, calculate your tax liability, and see exactly when you can sell tax-free. Updated for the 2-year rule from 1 July 2024.
Try a common scenario
How to Use This Calculator
Tab "Bright-Line Check"
Enter your purchase date and sale date, select the property type and whether it is your main home. The calculator instantly shows whether the sale falls within the bright-line period, the applicable period length based on your acquisition date, and whether bright-line tax is likely to apply.
Tab "Tax Calculator"
Enter your purchase price, sale price, improvement costs, and selling costs to calculate your taxable gain. Add your annual income (excluding the property gain) so the calculator can apply the correct marginal tax rate. Results show gross gain, taxable gain, tax payable, and net profit after tax.
Tab "Timeline"
Enter your purchase date to see a visual timeline of your bright-line period. The timeline shows the red taxable zone and the exact date from which you can sell tax-free. Your planned sale date is marked on the chart so you can see at a glance whether you are inside or outside the bright-line.
The Bright-Line Rules Explained
New Zealand does not have a general capital gains tax, but the bright-line test effectively taxes short-term property gains. If you sell a residential property within the bright-line period after purchasing it, any profit is added to your income and taxed at your marginal rate — exactly as if you had earned it as salary.
The bright-line period has changed several times as successive governments adjusted housing policy:
Before 29 March 2018 → 2 years
29 March 2018 – 26 March 2021 → 5 years
27 March 2021 – 30 June 2024 → 10 years (existing property) / 5 years (new builds)
From 1 July 2024 → 2 years (all residential property)
Tax calculation:
Taxable gain = Sale price − Purchase price − Improvement costs − Selling costs
Tax payable = Taxable gain × Marginal income tax rate
Marginal rates 2025/26:
Up to $15,600 → 10.5%
$15,601 – $53,500 → 17.5%
$53,501 – $78,100 → 30%
$78,101 – $180,000 → 33%
Over $180,000 → 39%
The acquisition date is the date you signed the sale and purchase agreement — not the settlement date. The same rule applies on sale. This distinction matters: if you sign on 30 June 2024 but settle on 15 July 2024, the 1 July 2024 rules do not apply — your acquisition date is still 30 June, so the pre-July rules govern your bright-line period.
The Main Home Exemption
The most important exemption from the bright-line test is the main home exemption. If the property was your main place of residence — predominantly used as your home — for the entire bright-line period, you generally do not pay bright-line tax when you sell.
However, the exemption has limits:
- If the property was only partly used as your main home (e.g., you rented out a room, used it as an Airbnb, or had extended absences), only the proportion of time it was your main home is exempt.
- You cannot use the main home exemption more than twice in any two-year period (the "frequent flipper" rule). If you have used the exemption twice in the past two years, you cannot use it again even if the property genuinely is your main home.
- The property must be in New Zealand. Overseas properties do not qualify.
Because the rules are nuanced, it is worth confirming your position with a tax advisor or accountant before assuming the exemption applies.
Example
Investment property sold within 2 years
Aroha purchases an investment property in Auckland for $750,000 in August 2024. She renovates it for $30,000 and sells it in May 2025 for $870,000. Her agent charges $17,400 (2% commission).
If Aroha had waited until after August 2026 to sell, no bright-line tax would have applied and her full $72,600 gain would be hers to keep. The 2-year period makes timing the sale a meaningful financial decision.
Other Exemptions and Special Cases
| Situation | Bright-line treatment |
|---|---|
| Main home (predominantly used) | Exempt — no bright-line tax |
| Inherited property | Exempt — bright-line does not apply to property acquired by inheritance |
| Relationship property settlement | Rollover relief — bright-line period continues from original acquisition, no tax on transfer |
| Business premises | Not residential land — bright-line does not apply |
| Farmland | Bright-line does not apply to most farmland |
| Company transfer (same economic owner) | Rollover relief may apply in limited circumstances |
| New build (acquired Mar 2021–Jun 2024) | 5-year bright-line (shorter than 10-year for existing property) |
| Overseas residential property | Bright-line does not apply (different rules may apply) |