Revenue Minister Simon Watts has announced that the brightline test will be reduced to two years, starting from 1 July. This move is expected to increase the supply of residential properties and help lower rent prices.
Watts explained that many New Zealanders are struggling with high rent costs. The government is taking steps to ease this burden by stimulating the economy and making living costs more affordable. One of these steps is the reduction of the brightline test period.
The brightline test is a significant factor in the rental market, as it affects the availability of residential properties. By making property investment more appealing, the government hopes to increase the number of properties on the market, which should help make rent more affordable.
In addition to this, the government has simplified the process for homeowners to exclude their main residence from the brightline test. Homeowners who live in their property for at least 50% of the time will not be subject to the two-year brightline test. This change is expected to encourage more homeowners to sell their properties, further increasing the supply of rental properties and helping to reduce rent prices.
Watts stated that these changes align with the principles agreed upon in the coalition agreements between National, Act, and New Zealand First.
