The new bright line test for buying and selling residential property has been passed into law. The rule says that you’ll pay tax on the profits when you buy and sell a residential property within two years, unless:
- it’s your main home and you have used it as your main home for 50% or more of the time you have owned it and you have used more than 50% of the area of the property as your main home, or
- you have inherited the property, or
- the property has been transferred to you as part of a relationship settlement agreement (however, if you go on to sell this property within two years of its original purchase date, the bright line rule will apply), or
- the property is held in a trust and it was the main home of the principal settlor of the trust, or the principal settlor doesn’t have a main home and it was the main home of a beneficiary of the trust.
Remember that these rules will apply to all property owners even if only part owner in a property.