A simple, targeted capital gains tax on commercial or residential property (excluding the family home or farm). Every dollar raised will be used to fix New Zealand's health system, including three free doctor's visits each year for every New Zealander.
- What's covered: commercial property and residential investment property only
- What's exempt: the family home (including lifestyle blocks), farms, inheritances, KiwiSaver, shares, businesses, and personal items
- When it starts: no tax on gains before 1 July 2027; applies only to profits made after that date, and only when the property is sold
- Rate: 28%, aligned with the company tax rate, so property profits are taxed like other business income
- Who pays: nine in 10 New Zealanders won't pay any tax on the property they own
- Where the money goes: 100% to health, including three free doctor's visits each year for every New Zealander
Here's how Labour's plan works
What's included
A 28 percent tax on any profit made after 1 July 2027 when a commercial or residential property (excluding the family home) is sold. Not a single dollar of profit made before 1 July 2027 will be taxed.
Quick example
A commercial building is purchased on 1 July 2025 for $400,000. On 1 July 2027 it is valued at $600,000, and it is later sold for $700,000. The tax applies only to the $100,000 gain after 1 July 2027.
What is exempt
Everything else. Your family home (including lifestyle blocks) and farms will be tax-free. KiwiSaver, shares, business assets, inheritances, gifts, and personal items like cars, boats, art, and furniture are all exempt. Small businesses selling their premises to buy a bigger one will not be taxed.
Who pays
Nine out of 10 New Zealanders do not own more than one property or a commercial property, so they won't pay the tax.
Where the money goes
Every dollar raised will be ring-fenced to provide all New Zealanders with better healthcare, starting with three free doctor's visits each year for all New Zealanders.
Why it works
It rewards work and productive investment and puts businesses that create jobs and drive innovation on a level playing field, rather than speculation on multiple properties.
What other countries do
New Zealand is one of the only countries in the world without some form of capital gains tax. Australia introduced a capital gains tax in 1985, and its economy and incomes have kept growing.
“You only need to look across the Tasman or to any other countries that have capital gains tax and see that they are not less productive, they are more productive than us.”
— Tax expert, Professor Craig Elliffe
Why is a capital gains tax being proposed?
New Zealand cannot build a strong economy through buying and selling property alone. We build it by rewarding work, backing Kiwi businesses - and making sure everyone can see a doctor when they need to.
Right now, too much of our wealth is locked in property, not in the productive economy that lifts wages and creates jobs. And one in six New Zealanders can't afford to see a doctor.
A simple, targeted capital gains tax will unlock investment so more capital goes into businesses, innovation, and jobs. Every dollar raised will be ring-fenced for our health system and fund three free doctor's visits for everyone each year.
Examples
Example 1: Jim and Pat
Jim and Pat have owned one property, their family home, for 25 years. They initially purchased it for $300,000. As it is their family home, they don't need to value it on 1 July 2027. In 2030, they decide to downsize and sell their home. At the time of sale, it is valued at $1.5 million.
Tax outcome: as this is their only property, Jim and Pat will not pay any tax.
Example 2: Sarah and Michael
Sarah and Michael own multiple investment properties. In 2018, they purchased their fourth property for $750,000. On 1 July 2027, the property is valued at $900,000. Sarah and Michael sell the property in 2029 for $1.2 million.
Tax outcome: only the increase after 1 July 2027 will be taxed at 28%.
Won't this increase rents?
- Landlords charge what the market allows. Rents are set by supply and demand, not by a tax paid years later when a property is sold.
- Decades of international evidence shows there is little impact on rent from a CGT. Rents do not go up because someone pays tax on a future sale.
What will this do to house prices?
- New Zealand won't get wealthier if we are only buying and selling houses from each other.
- We need to direct more investment into the productive parts of the economy. Fewer investors bidding against first home buyers is a good thing.
Is my KiwiSaver affected?
- No. KiwiSaver and businesses are exempt from the capital gains tax.
- Saying businesses that KiwiSaver invests in will be subject to the tax is false.
- Businesses that buy and sell property already pay tax - this changes nothing for them.
Will this tax small businesses?
- The tax only applies to residential and commercial property; it does not apply to the businesses themselves.
- Most small businesses lease their buildings, so are not subject to the tax.
- Some do own their property, and if they make improvements, that will be deductible.
- If they want to sell and move into a bigger property, there is no tax to pay.
What if a small business decides to sell its premises and move to a bigger one?
- They will not pay any tax.
- Our plan is about growing the economy and investing to help turn great ideas into profitable businesses that create jobs.
Doesn't New Zealand already tax more than Australia, and won't this make it worse?
- Australia introduced a capital gains tax in 1985, and its economy and incomes have kept growing.
- The issue isn't a capital gains tax or not - it's how we design the system to make it work for everyone.
- Labour's plan will shift investment from property speculation into the productive economy.
Three free doctor's visits for everyone, paid for with a simple, targeted capital gains tax.
Download the full policy document.
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