Changes to the bright-line property rule

From 1 July 2024 the bright-line property rule is changing.

The date you sell matters

If you sell a property on or after 1 July 2024 the bright-line property rule will only apply if the property is sold within 2 years of purchasing it.

If you sell a property before 1 July 2024 the current bright-line periods still apply.

• If you bought the property between 29 March 2018 and 26 March 2021, the bright-line property rule applies if you sell the property within 5 years of buying it.
• If you bought the property on or after 27 March 2021, the bright-line property rule applies if you sell the property within 5 years for qualifying new builds or within 10 years for other residential property.

Selling your main home

Generally, the bright-line property rule does not apply if you sell your main home, and this will not change. However, the criteria for the main home exclusion will apply as follows.

You must:

• use more than 50% of the property's area as your main home 
• use the property as your main home for more than 50% of the time you owned it. 

If you build on the land, you will not have to include the construction period when determining if your usage of the property qualifies for the main home exclusion.     

New rollover relief rules for associated persons

The rollover relief rules will be extended to the associated person rules. This includes: 

• associated companies, or a person and an associated company 
• relatives (within 2 degrees of relationship) 
• trusts and settlors, beneficiaries, and related trusts 
• a partner and a partnership 
• a look-through company and an owner of that company. 

These new rules will be limited to situations where the transferor and the transferee are associated for 2 years before the transfer. You will only be able to claim rollover relief once in any 2-year period.