The bright-line test applies to residential properties bought and sold on or after 1 October 2015
The government recently announced a supplementary Order Paper to the Taxation Bill has been introduced to extend the bright-line period from 2 to 5 years.
The 5 year period will only apply to residential land where the date that the person acquires an estate or interest in the residential land is on or after the date on which the Taxation Act receives Royal assent.
The 2 year period will continue to apply to land where the first interest was acquired before the date of Royal assent. In most cases, the date that a person acquires the first interest in land is the date of the sale and purchase agreement.
The Bill is expected to be passed and receive Royal assent in March 2018.
This leaves a small window of opportunity between now and the date of Royal assent to enter into sale and purchase agreements for the purchase of land for that land to be subject to the 2 year bright-line period rather than the extended 5 years.
If you are thinking of selling your holiday home, or rental in the very near future, please contact us to discuss if there is scope to re structure to fall within the 2 year bright-line period.