Bright-line tax relief: White Fox & Jones

With tax relief on the way, investors welcome the upcoming changes to the bright-line property rules.

Relief is on the way for many property owners come 1 July 2024. The current bright-line tax rules are being significantly altered. These rules essentially taxed capital gains on the sale of a property that wasn’t a person’s main home, if sold within 10 years of it being acquired. They are now being reduced to apply to a two-year period.

Soon all property bought before 1 July 2022 can be sold without triggering the bright-line rules, irrespective of the bright-line rule it was bought under. This will come as welcome news for property owners feeling restricted by the current bright-line rules. Often, there are situations where selling the property is necessary, but the bright-line rules and the potentially hefty tax bill that comes with it, make this a difficult and expensive option.

We are already hearing from clients who wish to sell when the new rules come into effect. It is important to get specific advice from your accountant and lawyer on how the bright-line rules will impact you. For most, the bright-line period will start when the transfer of the property is registered, and end on the date which the owner enters into an agreement for the disposal of the land, but there are exceptions to this, and it is is not always straight forward.

White Fox & Jones are experts in residential property transactions, and can provide practical advice, support, and guidance on navigating these changes