Prime Minister Christopher Luxon has recently sold another investment property, potentially securing a significant tax-free capital gain.
Records indicate that the property on Grey St was initially purchased in 2015 for $620,500 and was recently sold on November 25. While the sale price has not been publicly disclosed, the property was listed for $930,000, with an estimated value of $970,000 according to Homes.co.nz.
If Luxon sold the property for the current estimated value of $905,000 by CoreLogic, it would represent a gain of approximately 45% from the purchase price in 2015. This gain aligns with the overall market movement in Onehunga during the same period.
Despite recent changes to the bright-line test, which now requires property investors to hold a property for two years to avoid automatic taxation on gains, Luxon would not have been impacted by the legislation due to the timing of his property purchase in relation to the introduction of the test in 2015.
If Luxon’s profit from the Grey St sale is assumed to be $250,000, the potential tax liability could have been $97,500, calculated at the top tax rate of 39%. Luxon had previously sold another property on Grey St for $930,000 and also parted ways with his apartment in the Kate Sheppard complex near Parliament.
