Today (20 December 2023) the coalition government announced that the bright-line test will be reduced to two years from 1 July 2024.
This is what Nicola Willis had to say:
"Today I am announcing our immediate decision to bring the brightline test for residential property back to two years, effective from 1 July 2024. Removing this effective capital gains tax means that properties sold after 1 July 2024 will only be subject to the rule if owned for less than two years."
At GRA we are very pleased, not only with the reduction of bright-line timeframe, but also that the government have followed through and done what they said they would.
A two-year timeframe is fairer for genuine investors, while still capturing those who are really traders but who would have liked to pose as ‘long-term investors’ in order to avoid paying tax on the capital gains they make.
We expect the definition of “sale” will likely be a binding contract, but we need to wait for the detail to be confirmed. We will keep you posted as the details come to light.
This letter is to express my appreciation for the assistance and encouragement of both Anthony Lipscombe and particularly John Heaslip over the last financial year. The period since activating my trading trust has been one of considerable stress, as well as personal development, as I embarked on this as a relative business neophyte with virtually no awareness of the contemporary requirements of running a business, particularly the financial records aspect. During much of this period I have therefore felt considerable out of my depth. However I have been lucky enough to have had the benefit of the advice and support of John Heaslip in rationalizing what was a fairly chaotic set of records of the first year property trading. I am able to say that John in particular, has been unstinting in his attention to my needs and has done so in a manner which has never alluded to my extremely rudimentary grasp of managing a business, or even of being unable to set out a spread sheet properly. The result of the above guidance is that now, although my trading trust would still not be able to operate without the advice of GRA, I do least feel a sense of satisfaction that I have got to my present point without major disaster and that my property trust does now have some kind of firmer basis for any future activities - Name withheld by request
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