Growing support for capital gains tax in New Zealand
Monday 28 September 2026 · 2 outlets · 2 reports · updated In this story Deloitte
Polling indicates increasing public support for a comprehensive capital gains tax in New Zealand. While some experts argue that tax debates focus too much on culture wars, others are examining how such a tax could impact personal investments.
Key facts
3 facts
- Labour proposes a 28% capital gains tax on investment property starting July 2027
- The proposed tax excludes farms, businesses, KiwiSaver, and the family home
- New Zealand's GST system is ranked first globally for its purity
The full story
1 min read · 2 outlets
The Labour Party has proposed a 28 per cent capital gains tax on investment property, which would include second homes and houses unoccupied for four years or more. This tax would apply only to the years since the owner occupied the property and is intended to take effect from July 2027 if Labour is elected. The proposal excludes businesses, farms, the family home, KiwiSaver shares, and inheritances.
Tax expert Geof Nightingale supports the Labour proposal, noting that if the government taxes capital gains on investment property, it is consistent to allow interest deductions for associated mortgages. Nightingale argues a capital gains tax is necessary for equity and efficiency, stating there is no economic argument to justify treating a $100,000 property gain differently from a $100,000 salary.
Economist Robyn Walker has criticised the capital gains tax as a revenue tool, calling it a "complete effing waste of time" because it is unpredictable and fluctuates with markets. Walker and economist Brad Olsen suggest that New Zealand's goods and services tax is a more efficient way to raise large-scale, predictable revenue.
Political debate continues as the National Party has used a "no new taxes" campaign slogan, though it has not ruled out increasing existing taxes. Other parties, including the Greens, Te Pāti Māori, and Opportunity, have proposed various changes involving land, wealth, and inheritance taxes.
Where reports differ
- Labour's proposal is described as a flat 28% tax on gains from commercial or residential property, while another report specifies it applies to second homes and houses unoccupied for four years or more, applying only to the years since occupation.
Compiled from reports by Stuff and Newsroom.