Property, it's one of Tauranga's hottest topics of debate.

Nationwide, plans to bolster the tax rules on property transactions are giving residents a chance to delve into the issue.

Tauranga MP Simon Bridges urges the public to offer feedback on the A Bright-line test for sales of residential property consultation document. Photo: File.

A Bright-line test for sales of residential property paper currently out for consultation by Inland Revenue and Treasury officials, seeks public feedback on the final design details of the test.

The new ‘bright-line' test makes it clear that all property buyers, including overseas buyers, will require income tax to be paid on any gains from the sale of residential property bought and sold within two years.

These new rules are to be included in a tax bill to be introduced in September.

Tauranga MP Simon Bridges says with these rules around selling residential property changing it is vital Tauranga residents make their voice heard.

'The document is about trying to deal with property speculation and ensure income tax is paid on the sale of residential properties within a couple of years outside of the family home.

'Property is a real big deal for Tauranga and so I strongly encourage anyone with a bit of an interest to read the consultation document and make their views know with a submission.”

Currently, when assessing whether tax should be paid on the gain from a sale, Inland Revenue relies on a seller's ‘intention' to either live in the property or sell it for a quick gain.

Once enacted, the bright-line test will apply to residential properties for which an agreement to purchase was entered into on or after October 1, 2015.

The only exemptions are a person's main home, including a main home held in trust, property that is transferred after a relationship break up and homes that are inherited.

The paper proposes new definitions of 'residential land” and 'main home”, and clearly identifies the dates of acquisition and disposal of a residential property so a seller and Inland Revenue know if the sale falls within the bright-line test, and clearly spells out property that will be exempt from the test.

'Public feedback is important and I would value the input of people in Tauranga. We want to ensure that everyone pays their fair share of tax and you can help by participating in the consultation process,” says Simon.

Revenue Minister and Rotorua MP Todd McClay says the consultation paper is an important step in the Government's plans to bolster the tax rules on property transactions and help Inland Revenue to enforce them.

Todd says the proposed bright-line test will help to clarify whether or not gains on the sale of a property are taxable.

'The bright-line test, together with the measures introduced to Parliament last week in the Taxation (Land Information and Offshore Persons Information) Bill, will hlp Inland Revenue to more accurately identify investors in residential property, and ensure that they pay their fair share of tax, whether they are in New Zealand or overseas,” says Todd.

The consultation paper, Bright-line test for sales of residential property, is available at www.taxpolicy.ird.govt.nz. Closing date for submissions is July 24s.