Under the current rules, the bright-line tax rule means that if you sell a residential property you have owned for less than 10 years, you may have to pay tax on the profit. On 1 July 2024, this 10-year brightline period will reduce to 2 years.
Currently, properties purchased between:
The changes on 1 July 2024 will mean that any properties purchased before July 2022 will no longer be subject to the bright-line rule, because after 1 July 2024, the sale of those properties will have occurred after at least two years.
Generally, the bright-line tax rule does not apply if you sell your main home, and this will not change. However, to qualify for the main home exclusion, you must:
If you buy another property as your main home, that new home will also be excluded as long as the above applies.
In addition to the main home exemption, there are also exemptions that apply where:
If you are planning to sell a residential property, particularly one that is not your main home (for example, a residential rental or beach house), you should talk to your lawyer or accountant first.
If you are an investor or need qualified advice, our Property team are here to help.
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