Capital Gains Tax (CGT) is a tax on the profit you make when you sell something like a house or investment.
If you buy an investment property for $600,000 and later sell it for $800,000 – that’s a $200,000 profit. Under this plan, you’d pay tax (around 28%) on that $200,000.
It’s kind of like how we pay tax on our wages, but this is tax on money made from selling property.
Who does it affect?
This tax would mostly apply to people who own more than one property – the ones who buy and sell houses to make a profit.
Only about 10% of homeowners in Aotearoa have multiple properties, so around 90% of homeowners won’t be affected.
If you own one home or are renting, this doesn’t apply to you.
It also wouldn’t apply to:
- Your main home
- Farms
Details for Māori land and collective ownership (like whenua trusts or papakāinga developments) haven’t been confirmed yet, so that’s something to keep an eye on.
Why are people talking about it?
Because Labour says they’d use the money from this tax to pay for free GP visits for everyone – up to three per year.
They’re also saying it’s about fairness: most workers pay tax on every dollar they earn, but profits from selling houses often aren’t taxed unless the property is sold within a short period.
New Zealand already has the bright-line test, which taxes profits on residential properties sold within a set period (currently within a two-year period of buying the property). A Capital Gains Tax would go further – applying to all investment property sales, no matter how long you’ve owned them.
Most countries already have some form of capital gains tax – New Zealand is one of a few that doesn’t.
Does it only hit the wealthy?
Pretty much. It’s mainly for those who have investment properties or own multiple houses.
Some small investors or whānau who’ve saved to buy a rental could also be affected if they sell and make a profit.
For Māori land trusts and community housing projects, the details aren’t clear yet. It will depend on how land is owned and whether it’s ever sold – something Māori experts say will need careful attention.
Māori economist Matthew Roskruge (Te Āti Awa, Ngāti Tama) told RNZ, “Better late than never” – saying a CGT is overdue and would mostly target those who profit from property rather than everyday whānau.
Why it matters for Māori
Even if it doesn’t affect most of you directly, it still matters where the money goes.
If it’s reinvested into health, housing, and equity, it could make a real difference for our whānau.
It’s also important that the tax system recognises collective and intergenerational Māori land ownership, to make sure it doesn’t create barriers for iwi, hapū, or community housing projects trying to build for the future.
CGT is about how we share the load. Right now, people who make heaps from selling houses often pay no tax, while workers get taxed every week.
Labour’s saying, “Let’s balance that out.” Opponents are saying, “It’ll scare off investors.”
Either way, it’s a big kōrero about fairness, housing, and where our public money should come from.
Sources
- RNZ – Better late than never: Māori economist says capital gains tax weak but overdue (2025)
- 1News – Labour announces new capital gains tax policy, 28% rate from 2027 (2025)
- The Tax Working Group – Taxation of Capital Income and Wealth (2018)
