Abstract:
The “bright-line test” was introduced to address concerns regarding the New Zealand property market. In particular, concerns about the property market over the impact foreign investors and property speculators were having on house prices, while also easing Inland Revenue’s administrative and enforcement processes in respect of property sales. The test imposes tax on gains derived from the sale of residential property (beyond the main home) originally acquired less than two years prior. This research provides a qualitative and empirical assessment of the legitimacy of the bright-line test as sound tax policy from the perspectives of three types of participants interviewed by the authors: practitioners, academics and other interested parties (individuals from professional representative organisations). These perspectives were obtained through individual interviews with each participant. Further, a short response to these perspectives from a government representative was also obtained towards the end of the research-gathering process, in seeking to further assess the arguments in favour of the bright-line test as sound tax policy. Through this empirical process, this article builds on the conclusions reached in two earlier articles published in this Journal.
