Skip to main content

COVID-19 - Level 1 If you've been affected by COVID-19, we may be able to help. Find out more

If you receive a property as part of a relationship settlement agreement, you will not pay tax on the property when it's transferred to you.

If you sell the property within 2 or 5 years of the date it was first bought in the former relationship - you will pay income tax on any gain you make unless it is your main home.

The bright-line property rule may also apply if you transfer a share in the property to a new partner. If you both, as joint owners, sell the property within the bright-line period your partner may have to pay tax on the profits of their share if the property is not their main home.

Example: Sam gives Bobby a half-share in a rental property

When Sam and his partner split up in 2014 - he got a rental property as part of the relationship property settlement.

On 7 November 2018 Sam decided to transfer a half-share in the property to his new partner Bobby. On 7 May 2019 they decided to sell the rental property.

Because Bobby had owned her share of the property for only 1 year and it was not her main home, she will have to pay income tax on her share of the profit from the sale.