Selling your main home acquired before 27 March 2021

The bright-line test does not tax the sale of a property that has been your main home.

Main home exclusion

You can claim the main home exclusion if you:

• used more than 50% of the property’s area as your main home (including the yard, gardens, and garage)
• lived in the property as your main home for more than 50% of the bright-line period.

If either of these is 50% or less, then the main home exclusion does not apply, and you will need to pay tax on any profit when you sell it.

For example, if you use 40% of a property as your main home and rent out 60% as a flat, you cannot use the main home exclusion when you sell that property.

You must have lived in the property as your main home

The exclusion will not apply when only a family member and not the owner has used the property as their main home.

The property does not need to have been used without interruption. For example, a main home can be rented out for short periods while you are on holiday or before settlement of the sale of the property, as long as the total time it is used as your main home is more than the total time it is not used as your main home.

Construction period

When you build a new home, you can ignore the construction period when determining if your usage of the property qualifies for the main home exclusion.

Only look at your usage before construction began, and from when construction was completed to when the property was sold.

Construction is the work to build the home and includes the design phase.

Construction is usually considered complete when the code compliance certificate is issued under the Building Act 2004.