A CGT looks likely. Wealth and inheritance taxes are off Labour's table — for now
New Zealand's election campaign has opened a wide-ranging debate about how property, wealth, and capital are taxed — and for mortgage advisers with clients weighing investment decisions, the policy landscape is shifting faster than many realise.
The clearest signal from the Opposition came this morning, with Labour leader Chris Hipkins ruling out his party's potential coalition partner's most ambitious tax proposals. Speaking to media this morning, Hipkins was unambiguous: "So, no to wealth taxes, and inheritance taxes, and increased corporate taxes. We've been pretty clear on that."
What Labour does support is a narrower capital gains tax covering residential and commercial property — but explicitly not the family home — applied at 28% on realised gains from 1 July 2027, with proceeds funding three free GP visits a year for all New Zealanders. Hipkins said the policy was grounded in conservative projections of 3% annual house price growth.
"At the moment, the Treasury forecasting between 3 and 4%, where it is down on what they were forecasting before, but we deliberately made our estimates conservative on the basis that house prices have been slower — and, actually, slower house price growth is a good thing for New Zealand," he said.
He also defended the CGT's practical advantages over a wealth tax, noting that property could not be moved offshore the way financial assets could.
"Whereas, with a capital gains tax... we wouldn't run that risk because you can't generally tend to move your physical property," Hipkins said.
What the parties are actually proposing
As RNZ's tax policy overview outlines, the full suite of proposals on the table is considerably broader than Labour's CGT.
The Green Party's package includes a 2.5% annual wealth tax on net assets above $10 million, a 33% inheritance tax on assets and gifts above $1 million, a new 45% top income tax rate for earnings above $160,000, and a $10,000 tax-free threshold. For property investors, the key practical question under the Green inheritance tax is whether inherited investment properties would trigger a liability — the answer is yes, with family homes exempt but investment properties included.
The Greens say 96% of New Zealanders would receive a net tax cut under their plan, though the party acknowledged an $800 million calculation error in its initial policy costings, attributed to a typo, which it has since corrected.
Deloitte tax partner Robyn Walker described the Green capital acquisition tax as effectively an inheritance tax, noting that its family home exemption could unintentionally encourage wealth to remain concentrated in residential property.
Westpac chief economist Kelly Eckhold said New Zealand was unusual in lacking a CGT, adding that "the tax treatment of property here is relatively advantageous compared to most jurisdictions where there would be some sort of capital gains tax."
National, currently in government, opposes all new taxes proposed by both Labour and the Greens.
What's already changed — Budget 2026
One Budget 2026 change is already confirmed to affect borrowing costs directly — a new levy on banks, non-bank deposit takers, and insurers is expected to raise $290 million over four years from mid-2027, with costs likely to be passed through to mortgage rates. Deloitte's Robyn Walker described the budget overall as delivering "plenty of small, but meaningful, tax changes" through incremental reform rather than structural overhaul — a theme she attributed to having a chartered accountant as Minister of Revenue.
Other changes in train include the extension of the Foreign Investment Fund revenue account method to all natural persons, easing the tax burden on clients with offshore share portfolios, and an additional $15 million per year for Inland Revenue compliance activity — signalling more active enforcement ahead. 1News reported that Hipkins indicated Labour would also scrutinise the bank levy further before committing to its own position on it.
What advisers should watch
For property investors and their advisers, the most actionable election-period question is whether a Labour CGT would apply to existing holdings — the answer is no, with no tax on gains accrued before 1 July 2027.
Simplicity chief economist Shamubeel Eaqub told RNZ that any CGT decisions needed to be "politically enduring through economic and political cycles," suggesting meaningful structural reform remained some way off even in a change-of-government scenario.
Labour's CGT on property remains the most credible new property tax on the table — the Greens' wealth and inheritance proposals are unlikely to proceed in any Labour-led coalition without significant modification, and Hipkins has drawn his red line clearly.
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