Labour's Proposed Capital Gains Tax Is Bad for Kiwis and New Zealand

What Is a Capital Gains Tax?

A capital gains tax (CGT) is a tax on the profit made from the sale of certain types of assets, such as real estate, shares, and business assets.

What is Labour Proposing?

The Labour Party wants to introduce a 28% CGT on all profits from selling investment properties and commercial real estate, starting 1 July 2027 (if it wins the next election).

How does Labour’s Capital Gains Tax Impact Kiwis?

• Discourages savings and investments
  While Labour’s CGT excludes the family home, many Kiwis invest in property, shares, and small businesses to save for retirement and provide for their families. Taxing the gains from these investments would discourage saving and investment and make it harder for Kiwis to get ahead.
  It also reduces KiwiSaver returns. If you’ve invested in a KiwiSaver fund that sells a New Zealand business or land because it no longer needs it or because it wants to shift to another location, then your returns will be affected.
• Threatens small businesses
  Small business owners often invest years of effort and personal savings into growing their businesses. Labour’s CGT would reduce the reward for this hard work and stifle entrepreneurship and innovation.
• Creates housing market uncertainty
  Imposing a capital gains tax on investment properties would make investment in rental properties less attractive and reduce the supply of rental housing, drive up rents and make it harder for people to find affordable accommodation.
• Complex and costly
  Implementing a CGT would make the tax system more complex and increase administrative costs It would also make NZ less attractive to domestic and international investors right when we need more investment to grow the economy, create jobs and lift incomes.

What does National think about Labour’s Capital Gains Tax?

Taxing New Zealanders who work hard and do the right things by saving, investing or building a business - then spending Kiwis’ hard-earned money - is more of the same old Labour; and it is not in New Zealand’s best interests.

Labour’s tax and spend approach is what left New Zealand in a mess and Kiwis worse off. It’s exactly where Labour (and their coalition partner the Greens) will take New Zealand again given the opportunity.

National believes in lower taxes because we think you should be rewarded for doing the right things and we don’t think government should take your money unless it can spend it better than you can.

National won’t introduce a Capital Gains Tax.