Jim Thomas Lee
Solicitor
tel:+6472620423
mailto:jim.lee@hobec.co.nz
Qualifications
- Bachelor of Laws (First Class Honours), University of Waikato 2023
- Diploma in Health Services Management Level 7 (Top Scholar), National Tertiary Education Consortium 2016
- Bachelor of Science in Nursing, Ateneo de Zamboanga University 2013
Contact
- DDI: +64 7 262 0423
- M: +64 21 849 487
- E: jim.lee@hobec.co.nz
Jim is a solicitor within Luke Stewart’s property and commercial team, in Holland Beckett’s Tauranga office.
Jim was born and raised in the Philippines, where he worked as a nurse in the orthopaedic and emergency department and completed his nursing degree. He moved to New Zealand in 2015. Here he completed his diploma in health services management, and began working as a community support worker caring for people with various disabilities, he has a special interest in working with people with mental health concerns.
Having always wanted to study law, in 2020 Jim decided to pursue a Bachelor of Laws at the University of Waikato, which he completed with First Class Honours in 2023. Jim joined the Holland Beckett team shortly after.
Outside work Jim enjoys exploring New Zealand with his wife and daughter, getting involved in his church community and reading philosophy.
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Bright-line Tax Changes – What You Need To Know
It is a bright day for some property owners this July with the relaxing of the Bright-line Test requirement.
What is the Bright-line Test
The Bright-line test sets a out a timeframe where if a sale of a residential property occurs, the profit gained may count as income and therefore be taxable. However, some exceptions or rollover reliefs may apply that sidesteps the Bright-line rule.
The Bright-line Test Historically
From its inception in 2015, the Brightline test was set for a period of 2 years. A first amendment extended the period to 5 years if residential properties were purchased between 29 March 2018 and 26 March 2021. A further amendment was then made for residential properties purchased between 27 March 2021 and 30 June 2024 to have the Brightline period for 5 years for qualifying new builds or 10 years for other residential properties.
Bright-line Latest Changes
As of 1 July 2024, the Bright-line period is reduced back down to 2 years. So, residential properties sold on or after 1 July 2024 that is outside the 2-year period from when it was purchased will not be subject to the new Bright-line test. However, other tax obligations may still apply particularly to those who make a living out of buying and selling residential properties. Tax obligations may also apply if caught by the “intention test”, the idea being that if you buy a property with the intention of re-selling it to make a profit, you can be taxed.
Some Exceptions to the Bright-line Test
The Bright-line test does not apply if you are selling your main home. However, the main home must have been used “predominantly, for most of the time” during the period you own it.
The test also does not apply to residential properties transferred to the executors, administrators or beneficiaries of a deceased estate.
Rollover Relief
A rollover relief may also apply. This is when a transferee to whom the residential property is transferred is deemed to have acquired the residential property at the same time as when the transferor acquired the residential property.
Rollover reliefs may apply between transferors and transferees who are associated persons such as transfers between certain family members, some transfers of trust property, transfers of relationship property or transfers resulting from separations. However, the associated persons must have been associated for at least 2 years prior to the date of the transfer of residential property.
Conclusion
Only so much can be said in this article regarding the tax implications in selling a property. It is always prudent to seek legal and tax advice from a qualified professional when doing so. But at least the time frames for Bright-line which was resulting in profits from many rental property sales being taxed have been reduced from 1 July 2024. Please feel free to contact us for specific advice on your rental property sales.