What’s happening at Woodward Chrisp
Bright-line test extends tax liability: what this means for your residential rental property, section or holiday home
You are probably now well aware that the bright-line test has been extended to five years.
If you own a residential rental property, a holiday home or a residential section (land that a dwelling can be built on under the local council's planning rules), changes to the bright-line test may mean you have to pay more tax depending on how long you have owned the property before you sell.
The current law came into effect 1 October 2015 and states that if any residential rental property, or a holiday home, is sold within two years of being purchased, you have to pay tax on any profit from the sale.
This timeframe has now been extended to residential rental property sold within five years for property purchased on or after 29 March 2018. There’s more detail on how this will work here.
