Hi
I sold in Dec 2020 and purchased Feb 2021 , on a general mail out from lawyers I read the brighline test article and would really like some clarification on it, I have just one house , the one I live in, it says your main house is exempt from the brightline test , but also says if you show a pattern of selling your main home the main home exemption doesnt apply, who decides what a pattern is ? and timeframes, seems not very clear and a grey area, what if your circumstances have changes, relocating , not happy with house, family, does this mean to avoid the tax you have to stay in it.... says something about 2 or more sales in a 2 year period then your liable . if anyone could clarify that would be great

daz1968 - 2021-07-07 16:30:00

Lots of info on the IRD site, including a decision tool at the below link, towards the bottom of the page.

https://www.ird.govt.nz/property/buying-and-selling-resident
ial-property/the-brightline-property-rule

artemis - 2021-07-07 18:47:00

daz1968 wrote:

Hi
I sold in Dec 2020 and purchased Feb 2021 , on a general mail out from lawyers I read the brighline test article and would really like some clarification on it, I have just one house , the one I live in, it says your main house is exempt from the brightline test , but also says if you show a pattern of selling your main home the main home exemption doesnt apply, who decides what a pattern is ? and timeframes, seems not very clear and a grey area, what if your circumstances have changes, relocating , not happy with house, family, does this mean to avoid the tax you have to stay in it.... says something about 2 or more sales in a 2 year period then your liable . if anyone could clarify that would be great

how long had you owned the house you sold in December 2020?

gabbysnana - 2021-07-08 09:13:00

I think its 2 in 3 years or 3 in 2 years and a bit of a pattern to stop tradies buying do ups and flip etc.

shorebee - 2021-07-14 14:12:00

No it won't apply to you, this is your main home, IRD would be looking for a pattern over a number of years so for you the last couple don't mean a squat. Move on.

msigg - 2021-07-14 17:00:00

You can use the main home exemption twice in 2 years only, the only exception is if the 3rd time is a matrimonial property settlement.

lizzyj - 2021-07-15 14:29:00

lizzyj wrote:

You can use the main home exemption twice in 2 years only, the only exception is if the 3rd time is a matrimonial property settlement.

I looked at the wording for main house, it says 2 times in a two year period immediately before you sell, so that would make up of the one I sold in mid april settlement this year and my current house if sell in summer next year
its in area I dont want I was foolish to sell first, if I do sell in summer will get it right and buy first this time around in right location and school zone. the ird on site say they cant determine what a pattern is its up to the individual which I find strange

daz1968 - 2021-08-19 21:03:00

It may be strange but that suits you. You don't have a pattern of selling, you just made a mistake and so are selling again - if there was no intention of making a profit on an early resale when you bought the house, you should be fine.

Edited by nic48 at 1:03 pm, Wed 25 Aug

nic48 - 2021-08-25 13:03:00