Should you pay tax on the sale of your house (The bright-line property rule)?
If you are selling a residential property, that was not your family home and your original intentions were to make a gain on it, then you more than likely have to pay tax on any profit that you make.
Things that are considered, on whether and what tax to pay are:
Your intentions when you purchased
Your history of buying and selling
Whether you are in or associated in the property industry
Whether you buy and sell a property within five years or two years if purchased between 1 October 2015 to 28 March 2018
We all purchase property to hopefully make a gain on the sale, however, if that is your only intention, it is not your family home and you sell within the 5 years, then you are pretty much in the spectrum of needing to pay tax. But it is not always as simple as that – let’s say you purchased a long-term rental where it is never your family home, then you may not have to pay tax on the profit of the sale. That is why history will also need to be looked at. We always recommend that you come and talk to us, as there are many things to consider. Check out this link from IRD for further information.