This bright line property sale information form is required to be completed and submitted to IRD, along with the income tax return, if a taxpayer sold or transferred land which is taxable under the bright line test.
Brightline Property Sale Information Form - IR 833
Broadly, “bright-line” land sale test for residential land requires income tax to be paid on gains from the disposal of certain residential property acquired and disposed of within ten years (note timeframe can be different dependent on when the property was purchased).
Exceptions from the bright-line test may apply if the property is the main family home, farmland or business premises, or if the property is transferred as part of an inheritance or relationship property settlement.
The purpose of the bright-line test is to supplement the purpose or intention test (i.e. CB 6 of the Income Tax Act 2007). The bright-line test applies only where none of the sections from CB 6 to CB 12 of the Income Tax Act 2007 apply. However, sections CB 13 and CB 14 of the Income Tax Act 2007 apply when the bright-line test does not apply.
You can find more about taxation on land transactions here.
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