With the updated brightline rules coming into force on 1 July, many people are wondering just how this may look for them.

One change to the brightline rules which is relevant for home owners is a change to the main home exclusion from brightline. The change means reverting back to the old main home exclusion which requires the dwelling to be used predominately, for most of the brightline period, as the main home of the person.

This gives rise to the question of whether the change to the main home exclusion will apply retrospectively to homeowners who are now under the new 2 year test.

The legislation and relevant commentary suggest that where the new brightline applies (e.g. sale and purchase agreement for disposal entered into after 1 July) the new main home exclusion will apply for the new brightline period. This means the new main home exclusion (under the new 2 year test) may apply retrospectively if your home is sold after 1 July 2024, even if it was purchased before this date.