Restoring Two-Year Brightline Test to Boost Housing Supply and Lower Rents

The Government has also simplified the main home exclusion from the bright-line test by introducing a clear test for what is exempt.

Restoring the brightline test to two years will help increase the supply of residential property, putting downward pressure on rent, Revenue Minister Simon Watts says.

“From 1 July, the brightline test will replace the five and ten-year periods with a more balanced two-year period,” Watts announced.

“Every day, New Zealanders are struggling with higher costs of rent, and this Government is making common-sense decisions to make life easier by rebuilding the economy and easing the cost of living. By restoring the brightline test to two years, we are doing exactly that.

“A significant issue causing rents to skyrocket is the lack of available residential properties for renters to choose from. By making investment in residential property more attractive, we will see a greater supply of properties in the market, which will help make rent more affordable.”

The Government has also simplified the main home exclusion from the bright-line test by introducing a clear test for what is exempt. Homeowners will no longer be subject to the two-year bright-line test if they occupy the home as their main residence for 50 percent of this time.

“This will make it easier for homeowners to get their property onto the market and sold, leading to more residential properties for renters to choose from and taking some of the upward pressure off rents,” Watts explained.

“This delivers on one of the key decision-making principles as part of the coalition agreements between National, Act, and New Zealand First.”