The Revenue Minister can't say if a cancer patient staying away from home to seek treatment will be forced to pay a capital gains tax on their property when sold.
It comes after Inland Revenue revealed a new interpretation of the bright-line test could see thousands of Kiwis slapped with a capital gains-styled levy if they sell a house bought within the previous 10 years after spending 12 months away from it.
A concerned AM viewer has since revealed her son was living outside his family home while being treated.
"Hi my son bought his own home in 2020, not long after he bought it he was struck down with leukaemia, he has spent most of his time in Chch, he lived in Gore, fighting it, which included having a transplant in Sept 2023, he is living with us while he recovers from his transplant," the viewer said.
"[It] seems very unfair, he never intended to be away from his home, had saved up and worked hard to buy this home when he was 21."
Revenue Minister Barbara Edmonds said work was underway to find a fix to the bright-line test extension, which was never meant to include the family home.
In an interview on Thursday, Edmonds was asked multiple times if the tax would apply to the situation of the AM viewer's son.
"I can't speak to that specific situation. Again, I don't have all the information before me but the bright-line test has an exemption for the family home," she said.
In 2021, when the Government extended the bright-line test from five years to 10, Finance Minister Grant Robertson vehemently rejected Opposition accusations the family home would be included.
"It absolutely doesn't… It absolutely does not. While the property is your family home, the home you live in, the bright-line test does not apply," he said at the time.
"But beyond a 12-month period, if you are living somewhere else and renting it out, then it is clearly not your family home and then a fairness test would say the bright-line test should apply."
Asked on Thursday whether it was fair someone living away from home for cancer treatment could be subject to the bright-line test, Edmonds responded: "Again, the main home for a person should not be subject to the bright-line test and it's not fair if their main home is being tested under the bright-line test.
"I've asked for advice on it… I don't want anyone who has to be hospitalised to be subject to the bright-line test because it's their main home, so that's my view," she told AM host Ryan Bridge.
The Revenue Minister was also asked in Parliament on Tuesday how she could "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 bright-line test"?
"Again, I want to reiterate my earlier comments: there is no capital gains tax on the family home… the Commissioner of Inland Revenue, not the Minister of Revenue, is responsible for interpreting the tax legislation," Edmonds said, under questioning by National finance spokesperson Nicola Willis.
"The main home should not be caught by the bright-line test. This has never been and is not the intention."
Edmonds only took over the Revenue portfolio last month, after David Parker's resignation from the role following his disagreement with Prime Minister Chris Hipkins' torching of a tax-switch proposal.
In a statement on Wednesday, Hipkins' office said the Government would change the law to fix the bright-line interpretation if needed.
While there were also concerns Cyclone Gabrielle victims forced out of their homes could be subject to the bright-line test, the Government assured them "they will not be affected".
