Capital Gains Taxes and the Bright Line Test | Ep. 101

In this episode, we discuss capital gains taxes within New Zealand and the existence of the bright line test. Although we don't officially have a capital gains tax within New Zealand, we do have a capital gains tax by another name – the bright line.  The bright line says that any capital gains made on a property within the 5 years of owning a property are treated as income if the property was sold within those 5 years (except for the main family home). This means that there is effectively a 33% tax on capital gains made from property if you already earn at the top tax rate.