Tax & inflation New Zealand
Bright-line Test Calculator NZ
The bright-line test taxes the profit from selling residential property that you owned for two years or less, unless the main home exclusion applies. This calculator checks the dates, applies the exclusion if you tick it, and estimates the tax at your marginal rates.
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Bright-line result
—Time owned
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Within two years?
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Gain or loss
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Main home exclusion
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Taxable amount
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Tax on the gain
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How the result is reached
Working with a different rate? Edit the rates this calculator uses
These are the figures we verified on 2026-10-26. Change them to work with a historic period, or with a new rate that has been announced but which we have not published yet.
Inland Revenue; for sales on or after 1 July 2024
An estimate, not tax advice. An estimate for an individual selling one property. The main home exclusion has detailed tests on how much of the land and for how long it was your home, and the bright-line test interacts with other rules on property dealing, trusts and companies. Use Inland Revenue's property tax decision tool and speak to a tax adviser.
How does the bright-line test work in NZ?
If you sell residential property within two years of acquiring it, the profit is taxable income, unless you lived in it as your main home. The two years run from settlement of the purchase to the date the sale agreement is signed, for properties sold on or after 1 July 2024. A $65,000 gain on top of $95,000 of income would add about $21,450 of tax.
When the test applies
The test applies to residential land you acquire and sell within the bright-line period, with some exceptions, including the main home exclusion, inherited property and some transfers on relationship breakdown. The period is two years for sales on or after 1 July 2024, shortened from the longer periods (five or ten years) that applied before.
The exclusion depends on meeting Inland Revenue's main home tests, broadly that the property was your main home for most of the time you owned it and most of the land was used that way, so a long rental period can lose it.
Tax rates
A bright-line gain is taxed as income at your marginal rates, which run from 10.5% to 39% depending on your total income for the year. The tool adds the gain to your other income and finds the difference.
To see tax on other income, use the income tax calculator.
How this is calculated
The rule, step by step, so you can check any figure by hand.
the bright-line period starts at settlement of the purchase and ends when the sale agreement is signed; it applies if that is two years or lessgain = sale price − purchase price − costsif the main home exclusion applies, the gain is not taxedtax on the gain = income tax on (other income + gain) − income tax on other income
The test counts from settlement to the date of the sale agreement, not the date the sale settles, so signing an agreement in the last week of the two years can bring a sale inside the test even if it does not settle until later. For properties sold before 1 July 2024 the period was longer, so check the dates for older sales.
The gain is added to your income and taxed at marginal rates, so a large gain can push part of it into the 33% or 39% bands. Losses on bright-line property can be offset only against other bright-line gains.
A worked example
A property bought for $700,000 on 1 March 2025 and sold on 15 December 2026 for $790,000, with $25,000 of costs, by someone with $95,000 of other income.
- Time owned1 year 9 months, within two years
- Gain, $790,000 − $700,000 − $25,000$65,000
- Tax on income without the gain$21,228
- Tax with the gain$42,678
- Extra tax$21,450
About $21,450 of tax on a $65,000 gain.
If it had been your main home the gain would be excluded.
Property dealing and other rules
Separate rules tax property bought with the intention of resale, regardless of how long you hold it, and property developers and builders have their own regime. The bright-line test is an additional rule, not a replacement.
What it leaves out
Interest deductibility, GST, depreciation recovered and any transfer to a trust or company are not modelled. If the sale is close to the two-year boundary, take advice before signing.
What this calculator does not do
- Residential property sold on or after 1 July 2024
- Main home exclusion is a yes/no choice
- No GST, depreciation recovery or interest deductions
- Individuals only
Common questions
How long is the bright-line period?
Two years for residential property sold on or after 1 July 2024.
When does the two years start and end?
From settlement of the purchase to the date the sale agreement is signed.
Does the main home exclusion apply?
If the property was your main home for most of the time you owned it and used most of the land as such, the gain is excluded.
How is the gain taxed?
As income at your marginal tax rates, up to 39%.
Can I deduct a loss?
Only against other bright-line gains, not your salary.
Where these numbers come from
- Inland Revenue — the brightline property rule How the bright-line test works and its exclusions
- Inland Revenue — income tax for individuals The five income tax bands
Rates last verified 2026-10-26 Every figure Inland Revenue sets is re-checked against the source at least once a year, and again whenever a change is announced. Out of date? Tell us and we will fix it.
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