The Government has extended the bright-line property rule to 10 years for property acquired on or after 27 March 2021. The rules around when a main home is excluded from the bright-line test have also been amended.
We’ve updated our website to include these new changes.
Consultation on new builds for the bright-line test
The Government has indicated that new builds will continue to be subject to a 5-year bright-line period. Before this can be legislated, what is considered a 'new build’ is still to be consulted on. The Government intends for the legislation to be retrospective for new builds acquired on or after 27 March 2021.
Please note that the fact sheet mentions the extension to the bright-line test and rules around main homes are proposed. These changes have been enacted.
Consultation on interest deductibility rules
The Government has also indicated that it intends to remove the ability to deduct interest from 1 October 2021 for loans used to acquire residential property (unless it's newly built property) on or after 27 March 2021. Interest deductions will be allowed for property acquired before 27 March 2021, but will be phased-out over 4 income years.