Thinking about selling? Find out how New Zealand property tax laws might affect you (including whether you’ll face tax on any profit). Whether this is your first home, or you’ve owned property for years, now’s a good time to understand your obligations.
Tax law might not be the most exciting topic, but it can make a real difference to how much ends up in your pocket. Alongside getting a good price for your property, it’s good to know whether you’ll owe tax on any gain, or whether you can keep more of it to reinvest in something better suited to your needs.
Take a moment to read this (or check out our ‘How to Get Ready to Sell’ eBook) to see how property sales are taxed in New Zealand in 2025.
The bright‑line test now applies if you sell a residential property within 2 years of acquiring it (for disposals on or after 1 July 2024).
If you sell after owning it for more than 2 years (with sale after 1 July 2024), bright‑line generally does not apply.
Before 1 July 2024, there were longer periods (5 years, or 10 years in some cases) depending on when the property was acquired.
The main home (principal residence) exemption remains: if the property has been your main home, you can usually avoid bright‑line tax even if sold within the bright‑line period. There are certain conditions (e.g. predominant use, amount of time lived there) to satisfy.
Residential Land Withholding Tax (RLWT) still applies for offshore persons (or entities with significant offshore ownership) when they sell residential property in New Zealand within the bright‑line period. The seller’s conveyancer (or purchaser’s, if no conveyancer) must deduct and remit RLWT.
Interest deductions for residential rental property owners are being restored:
If it’s been your main home, you’re generally safe: you can avoid bright‑line taxation even if you’ve owned it for less than two years. No bright‑line tax, no RLWT (assuming you’re NZ resident and main home).
If the home you’re selling has been your main residence, then bright‑line doesn’t apply. Even if it went up a lot in value, you should be off the hook for bright‑line tax. If the property is held in a trust, then whether you’re exempt may depend on whether you meet the beneficiary/main home criteria.
If you bought a residential property (not your main home) and then sell it within 2 years (for disposals on/after 1 July 2024), then that gain is caught by bright‑line, and tax will be owed. Also, RLWT will likely apply if you're an offshore person or entity. Keep good records of costs, maintenance, selling expenses etc., because those will reduce the amount subject to tax.