Income Tax Act 2007

Income - Income from business or trade-like activities - Exclusions for residential land

CB 16A: Main home exclusion for disposal within 2 years

You could also call this:

"No tax on selling your main home within two years of buying it"

You do not have to pay tax on the sale of your main home if you sell it within two years of buying it. This rule applies if you used the home as your main home for most of the time you owned it. It also applies if you are a trustee selling a main home for a beneficiary of the trust. You can use this rule twice in a two-year period. But you cannot use it if you regularly buy and sell homes. A group of people can be treated as one person if they work together to buy and sell homes. If you are part of a group, you are considered to have significant involvement in the group's activities if you can direct what the group does. This rule helps decide if you can use the main home exclusion when selling a home. It is an important rule to understand if you are selling your main home.

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View the original legislation for this page at https://legislation.govt.nz/act/public/1986/0120/latest/link.aspx?id=DLM6663109.

This page was last updated on 5 April 2026 — View changes

Topics:

Money and consumer rights > TaxesHousing and property > Buying and selling homes

CB 15E: Disposals of land subject to section CW 3C, or

"Selling land you got from sharing with others: how to work out tax-free income"

CB 16: Residential exclusion from sections CB 6 to CB 11, or

"Exemption from tax when selling your main home"

Part CIncome
Income from business or trade-like activities: Exclusions for residential land

CB 16AMain home exclusion for disposal within 2 years

Section CB 6A does not apply to a person who disposes of residential land if the land has been used predominantly, for most of the bright-line period, for a dwelling that was the main home of—
the person; or
a beneficiary of a trust, if the person is a trustee of the trust and—
1. a principal settlor of the trust does not have a main home; or
2. if a principal settlor of the trust does have a main home, it is that main home that the person is disposing of.

For the purposes of determining under subsection (1) whether residential land has been used for most of the bright-line period predominantly for a dwelling that was the main home of the person or a beneficiary of a trust, as described in subsection (1), the period in which the dwelling was constructed is ignored.
The exclusion in subsection (1) does not apply to a person who disposes of residential land if—
the exclusion has been used by the person twice within the 2 years immediately preceding the bright-line end date for the residential land:
the person has engaged in a regular pattern of acquiring and disposing of residential land described in subsection (1).

For the purposes of subsection (3)(b), person includes a group of persons if the requirements of subsection (5) are met.
For the purposes of subsection (4), a group of persons—
means 2 or more persons when together all the persons occupy, or have occupied, residential land described in subsection (1); and
includes a person other than a natural person (the non-natural person) if another person referred to in paragraph (a) has significant involvement in, or control of, the activities of the non-natural person. For the avoidance of doubt, if the other person can direct, alone or as part of a group, the activities of the non-natural person, they have significant involvement in, or control of, the activities of the non-natural person.

Notes

Section CB 16A: replaced, on 1 July 2024, by section 12(5) (and see section 12(6) for application) of the Taxation (Annual Rates for 2023–24, Multinational Tax, and Remedial Matters) Act 2024 (2024 No 11).