3. Question No. 3—RevenueNICOLA WILLIS (Deputy Leader—National) to the Minister of RevenueQuestion No. 3—Revenue3. NICOLA WILLIS (Deputy Leader—National) to the Minister of Revenue: Does she agree with the Minister of Finance's statement that he was too definitive" when prior to the election he ruled out changes to the brightline test and will the Government's subsequent changes to the bright-line test result in some New Zealanders paying a capital gains tax on their family home?Hon BARBARA EDMONDS (Minister of Revenue): I always agree with the finance Minister's statements in the context that they were made. New Zealand has no capital gains tax on the family home. Further I have today announced that we will remove the brightline test for owners of flood- or cyclone-damaged properties who take up the voluntary buy-out offer which is co-funded by the Government and local authorities. We remain committed to supporting those affected by the severe weather events. In some cases a voluntary buy-out may trigger the brightline test or one of the other tests for land sales. The Government is clear: it isn't appropriate to apply the brightline test to these property sales because of the impact of weather events. This builds on earlier tax rollover relief changes made in April for the North Island weather events.Nicola Willis: How can she say there is no capital gains tax on the family home when the IRD has issued specific guidance which says that if a family-home owner is out of their home for 12 months for any reason they will be subject to a 10-year brightline test meaning in effect they will pay a capital gains tax on the sale of their home?Hon BARBARA EDMONDS: I repeat that there is no capital gains tax on the family home. I also remind the member that the brightline test was introduced by the National Party which created this uncertainty. Under National's rule the owner must have resided in the property as their main home. The main home exclusion will not apply when only a family member and not the owner has used the property as their main home. So this would've been caught by the National rule. Under their rules if that person was living in the home for less than half the time they owned it they would have been subject to tax on the entire gain on the sale.Nicola Willis: Why does she keep claiming that there is no capital gains tax on the family home when the IRD's explicit guidance about Rebecca says that despite never owning an additional home and having her husband and daughter stay in the sole home she owns she would have to pay a capital gains tax for the time she was away from her home?Hon BARBARA EDMONDS: Again I want to reiterate my earlier comments: there is no capital gains tax on the family home. Section CB16A which talks about the disposable under the brightline test the Commissioner of Inland Revenue not the Minister of Revenue is responsible for interpreting the tax legislation. The main home should not be caught by the brightline test. This has never been and is not the intention.Nicola Willis: Does the Minister think it's fair that a family would have to pay a capital gains tax on the sale of their family home just because one parent needed to move out of home for a period of time due to for example a work secondment or a family illness?Hon BARBARA EDMONDS: What's not fair is that under the previous rules by the National Government if a person was living in the home for less than half the time they owned it they would've been subject to tax on the entire gain on that sale.Nicola Willis: Does the Minister see that the best way to ensure that no family is subject to her capital gains tax by stealth would be simply to take the brightline test back to two years where it should stay?Hon BARBARA EDMONDS: I absolutely refute the mischaracterisation by that member who says that there is a capital gains tax by stealth. There is no capital gains tax in New Zealand on the family home.Nicola Willis: Does the Minister realise it's pretty confusing when she claims there isn't a capital gains tax for families but explicit IRD guidance makes clear that if a homeowner is out of their family home for more than 12 months for any reason at all—secondment renovations damage from a natural disaster—they will be exposed to her Government's brightline test if sold within the brightline period?Hon BARBARA EDMONDS: What is confusing is that these are the same rules that the National Party introduced when they brought in the brightline test in 2015. We sought to clarify the rules in 2021 to provide some cushion for those taxpayers. Therefore once again I reiterate there is no capital gains tax on the family home."