Parliament passes 'bright line' Bill
Parliament has passed the Bill that puts in place rules around property purchases that have been in force since October 1.
The retrospective legislation means income tax has to be paid on gains made from houses bought and sold within two years.
Tax law itself hasn't changed, it's the way the test is applied.
Until October 1, Inland Revenue had to determine that a house sold within two years was bought with the intention of selling it.
That was difficult to enforce, so it's been changed to a simple rule covering purchases and sales within two years unless the properties fall into exemption categories.
The exemptions are a person's main home – the one they normally live in – and inherited properties.
Houses under a relationship agreement are also exempt.
The Government says the "bright line" test will help curb property speculation.
Labour says all it means is that speculators will wait two years and one day before they sell a property.
The Bill passed its third reading today 107-12.
NZ First was the only party opposing it.
ACT leader David Seymour said during the debate the Bill was "an abomination" but he had to vote for it under his party's support agreement because it was a budget measure.