Capital Gains Tax in New Zealand - The Definitive Guide
What a capital gains tax is, what New Zealand already taxes, what is proposed and how capital gains taxes work in other countries
Updated 3 August 2026
Summary
MoneyHub is Non-Political: We do not endorse any political party, candidate or tax policy, and nothing in this guide is an argument for or against a capital gains tax. Our only job is to explain how things work so you can make up your own mind. This guide is general information only and is not advice in any form.
Our guide covers:
Know This First: What The Proposed Capital Gains Taxes Mean For You Right Now. Some practical, non-political points stand:
Summary
- Capital gains tax continues to be in the headlines as elections come and go and tax on property, shares and wealth becomes one of the defining issues.
- Our research team is frequently asked about capital gains taxes. This definitive guide is our contribution to explaining the concept, as we believe much of what gets shared online is confused, outdated, or pushing an agenda.
- Our guide is different. We explain what a capital gains tax is, what New Zealand already taxes (it is more than most people think), what each political party is proposing, and how countries like Australia, the United Kingdom, the United States and Singapore handle capital gains.
- Our purpose is to inform and help you understand the debate well enough to form your own view.
MoneyHub is Non-Political: We do not endorse any political party, candidate or tax policy, and nothing in this guide is an argument for or against a capital gains tax. Our only job is to explain how things work so you can make up your own mind. This guide is general information only and is not advice in any form.
Our guide covers:
- What is a Capital Gains Tax?
- Does New Zealand Already Have a Capital Gains Tax?
- Capital Gains Tax and Shares in New Zealand
- Capital Gains Tax and Property - the Bright-Line Test
- Crypto, Businesses, Farms and Other Assets
- Why is Everyone Talking About Capital Gains Taxes in 2026?
- What Each Political Party Proposes (2026 Election)
- How Labour's Proposed CGT Would Work - With Examples
- How Other Countries Tax Capital Gains - Australia, UK, US, Singapore and More
- Frequently Asked Questions
Know This First: What The Proposed Capital Gains Taxes Mean For You Right Now. Some practical, non-political points stand:
- Nothing has changed: The bright-line test, the intention rules, the FIF regime and everything else described below are the law today. A campaign policy changes nothing until it is legislation. For this reason, be careful making big decisions based on proposals. We suggest watching the detail after the election, not the headlines leading up to it.
- If you are planning a sale in the next 18 months anyway, the sensible step is professional tax advice on the rules as they stand - the bright-line test and intention rules catch far more people today than any proposed CGT would.
What is a Capital Gains Tax?
A capital gains tax (CGT) is a tax on the profit you make when you sell something for more than you paid for it. The "something" is usually an investment asset - a rental property, shares, a business, land or cryptocurrency.
The basic calculation is simple:
Sale price - purchase price (and eligible costs) = capital gain. The tax applies to the gain, not the full sale price.
For example, if you bought an investment property for $600,000 and sold it for $800,000, your capital gain is $200,000 (before costs). A capital gains tax would take a slice of that $200,000 - how big a slice depends entirely on the rules of the country you live in.
A few features appear in almost every CGT system around the world:
Know This: A capital gains tax is not the same as a wealth tax. A CGT taxes the profit when you sell an asset. A wealth tax charges you a percentage of your net assets every year, whether you sell or not. Both are part of election debates, but they work very differently - our dedicated guide to wealth taxes has more information.
The basic calculation is simple:
Sale price - purchase price (and eligible costs) = capital gain. The tax applies to the gain, not the full sale price.
For example, if you bought an investment property for $600,000 and sold it for $800,000, your capital gain is $200,000 (before costs). A capital gains tax would take a slice of that $200,000 - how big a slice depends entirely on the rules of the country you live in.
A few features appear in almost every CGT system around the world:
- You are taxed when you sell, not while you hold: This is called a "realisation basis". If your shares double in value but you never sell, there is usually no tax to pay. New Zealand's FIF rules on overseas shares are a rare exception, which we cover below.
- The family home is almost always excluded: Nearly every country with a CGT exempts your main residence.
- Rates and discounts vary enormously: Australia taxes half your gain at your income tax rate if you hold for a year. The UK charges a flat 18% or 24%. Singapore charges nothing at all.
- Losses usually count too: Most countries let you offset capital losses against capital gains, though the details differ.
Know This: A capital gains tax is not the same as a wealth tax. A CGT taxes the profit when you sell an asset. A wealth tax charges you a percentage of your net assets every year, whether you sell or not. Both are part of election debates, but they work very differently - our dedicated guide to wealth taxes has more information.
Does New Zealand Already Have a Capital Gains Tax?
The short answer is no - and also, sort of. New Zealand is one of the few developed countries without a comprehensive capital gains tax. There is no general rule taxing you when you sell an asset for a profit. However, some specific rules mean plenty of gains are already taxed as ordinary income, and some New Zealanders are surprised to find themselves caught.
What is already taxed (the detail is in the sections below):
And what is generally not taxed:
What is already taxed (the detail is in the sections below):
- Residential property sold within 2 years - the bright-line test taxes the gain at your income tax rate, unless an exclusion applies.
- Property bought with the intention of resale - taxable no matter how long you hold it. Intention is judged at the time you buy.
- Property dealers, developers and builders - profits from properties connected to their business are generally taxable, with wider rules that can catch sales within 10 years.
- Share traders - if you buy and sell shares as a business, or buy shares to sell them, your profits are taxable income. Our tax on investments guide has more details.
- Overseas shares above the FIF threshold - taxed annually on a deemed return, even if you never sell (more below). Our guide on FIF tax has more details.
- Cryptocurrency - Inland Revenue's view is that most people buy crypto to sell it later, which makes gains taxable - the IRD outlines this on their website.
- Gold bullion and similar assets - bought for resale, the gain is taxable on the same logic as crypto. Our tax on investments guide has more details.
And what is generally not taxed:
- Your family home (with limited exceptions for serial buyers and sellers)
- Investment property held long-term and not caught by the rules above
- NZX-listed shares held as a long-term investor
- The sale of a business (goodwill is usually a tax-free capital gain, though some parts of a sale are taxable)
- Inheritances - New Zealand has no inheritance tax, no estate duty and no gift duty
- KiwiSaver and PIE fund gains on New Zealand and most listed Australian shares
| Asset or situation | Gain taxed? | Which rule | Rate |
|---|---|---|---|
| Family home (your main home) | Generally no | Main home exclusion (limited exceptions for repeated buying and selling) | n/a |
| Residential investment property sold within 2 years | Yes | Bright-line test (sales on or after 1 July 2024) | Marginal income tax rate, up to 39% |
| Property bought with the intention of resale | Yes | Intention rules - apply regardless of how long you hold | Marginal rate, up to 39% |
| Property dealers, developers and builders | Yes | Business and land rules, including sales within 10 years in some cases | Marginal or company rate |
| NZ shares held as a long-term investor | No | Gains are capital; dividends are taxed | n/a (dividends at marginal rate) |
| Shares bought to trade or resell | Yes | Trading and purpose rules | Marginal rate, up to 39% |
| Overseas shares above the FIF threshold | Yes - annually | FIF rules - deemed 5% return taxed each year, even with no sale | Marginal rate on the deemed return |
| KiwiSaver and PIE funds (NZ and most listed Australian shares) | No | PIE rules - gains untaxed inside the fund | PIR capped at 28% on taxable income |
| Cryptocurrency | Usually yes | Inland Revenue treats most crypto as bought for resale | Marginal rate, up to 39% |
| Selling a business (goodwill) | Generally no | Capital gain - though depreciation recovery, stock and restraint of trade payments are taxable | n/a for goodwill |
| Inheritances and gifts | No | No inheritance tax, estate duty or gift duty | n/a |
Summary as at August 2026. Budget 2026 announced an increase in the FIF threshold from $50,000 to $100,000 of cost, intended to apply from the 2026/27 tax year, subject to legislation. General information only - individual circumstances vary.
Our View is simple:
- The claim "New Zealand has no capital gains tax" is only half true.
- We believe a more accurate statement is that New Zealand has no comprehensive capital gains tax, but taxes specific gains through the bright-line test, the intention rules, the trading rules and the FIF regime.
Capital Gains Tax and Shares in New Zealand
There is a lot of confusion about shares and capital gains tax. The treatment depends on what you buy, why you buy it, and how much you hold overseas.
New Zealand shares (and most listed Australian shares):
Overseas shares - the FIF rules:
New Zealand's closest thing to an ongoing capital gains tax is the Foreign Investment Fund (FIF) regime, and it works the opposite way to a normal CGT - it can tax you even when you have not sold anything.
Know This: In the 2026 Budget, the government announced two significant FIF changes - lifting the threshold from $50,000 to $100,000 of cost, and extending the "revenue account method" (a realisation-based approach previously reserved for new migrants) to unlisted foreign shares for all New Zealand taxpayers.
KiwiSaver and PIE funds:
Most KiwiSaver schemes and managed funds are Portfolio Investment Entities (PIEs). Inside a PIE, gains on New Zealand shares and most listed Australian shares are not taxed - the fund pays tax on dividends and on overseas holdings under FIF-style rules, at your Prescribed Investor Rate, which is capped at 28%.
Our View: This is why the design of any future CGT matters so much for KiwiSaver - over three million KiwiSaver members hold growth assets through these structures.
New Zealand shares (and most listed Australian shares):
- If you are a long-term investor, gains when you sell are generally not taxed. You pay tax on dividends, not on the increase in the share price.
- If you are a trader - buying and selling frequently to make profits, or buying shares with the dominant purpose of selling them - your gains are taxable as income at your marginal rate (up to 39%).
- There is no bright-line style time limit for shares; it comes down to purpose and pattern of behaviour, which Inland Revenue assesses case by case.
Overseas shares - the FIF rules:
New Zealand's closest thing to an ongoing capital gains tax is the Foreign Investment Fund (FIF) regime, and it works the opposite way to a normal CGT - it can tax you even when you have not sold anything.
- The rules generally apply once the total cost of your overseas shareholdings (excluding most individual ASX-listed Australian companies - you can check the IRD's list on their website goes above the FIF threshold.
- The most common method, fair dividend rate (FDR), deems you to have earned 5% of your portfolio's opening value each year and taxes that amount at your marginal rate, regardless of actual gains, losses or dividends.
- Below the threshold, most everyday investors are simply taxed on dividends, similar to New Zealand-listed shares.
Know This: In the 2026 Budget, the government announced two significant FIF changes - lifting the threshold from $50,000 to $100,000 of cost, and extending the "revenue account method" (a realisation-based approach previously reserved for new migrants) to unlisted foreign shares for all New Zealand taxpayers.
KiwiSaver and PIE funds:
Most KiwiSaver schemes and managed funds are Portfolio Investment Entities (PIEs). Inside a PIE, gains on New Zealand shares and most listed Australian shares are not taxed - the fund pays tax on dividends and on overseas holdings under FIF-style rules, at your Prescribed Investor Rate, which is capped at 28%.
Our View: This is why the design of any future CGT matters so much for KiwiSaver - over three million KiwiSaver members hold growth assets through these structures.
Capital Gains Tax and Property - the Bright-Line Test
The bright-line test is the closest thing New Zealand has to a capital gains tax on residential property, and it is often described that way. It taxes the profit on residential property sold within a set period, at your marginal income tax rate (up to 39%), unless an exclusion applies.
The current rules are as follows:
A simple example: Hamilton Rental Property Sale
Warning: Inland Revenue matches property sales against Land Information New Zealand records and follows up on sales inside the bright-line window to ensure all qualifying capital gains are taxed according to the law.
The current rules are as follows:
- For property sold on or after 1 July 2024, the bright-line period is 2 years - regardless of when you bought the property. Sales before that date used the older 5- and 10-year rules, which still matter for historical sales.
- The clock generally starts at settlement (when the title transfers to you) and stops when you sign a binding sale and purchase agreement to sell.
- The main home exclusion means the test does not usually apply to the home you live in - though using the exclusion repeatedly, or engaging in a pattern of buying and selling, can see it denied.
- Inherited property is excluded, and rollover relief can apply to certain transfers (for example, some transfers involving trusts and relationship property), though transfers between entities can restart the clock in other cases.
- Selling outside the bright-line period does not automatically mean tax-free. The intention test, and the rules for dealers, developers and builders, can still tax a sale years later.
A simple example: Hamilton Rental Property Sale
- Matt buys a rental in Hamilton in September 2024 for $700,000 and sells it in March 2026 for $780,000.
- He is inside the 2-year window, so the $80,000 gain (less eligible costs) is added to his taxable income for the year.
- If he earns $90,000 from his job, the gain sits in the 33% bracket - and had it pushed his total income above $180,000, the excess would have been taxed at 39%.
Warning: Inland Revenue matches property sales against Land Information New Zealand records and follows up on sales inside the bright-line window to ensure all qualifying capital gains are taxed according to the law.
Crypto, Businesses, Farms and Other Assets
We have grouped 'other assets' in this section to help explain the capital gains tax law that can apply depending on the gain and the asset.
Cryptocurrency: Inland Revenue treats cryptoassets as property, and its starting position is that most people buy crypto for the purpose of selling or exchanging it. That makes gains taxable as ordinary income for most holders - one of the stricter approaches in the developed world, and stricter than many crypto investors realise. You can read more about cryptocurrency asset sales on the IRD's website.
Selling a business: The value of goodwill when you sell a business is generally a non-taxable capital gain - a major difference from Australia and the UK, where business sales attract CGT. Parts of a sale are still taxable, including depreciation recovered on assets sold above book value, trading stock, and payments for a restraint of trade. If a company sells its assets, getting the cash out to shareholders tax-effectively has its own rules. If you're selling a business, a tax accountant is a helpful starting point to explain the situation.
Selling a farm: Similar principles apply - the land itself is usually a capital asset, but livestock, depreciation recovery and other components of the sale price have their own tax treatment, and farms bought with resale intentions or subdivided can be taxable. If you're selling a farm, a tax accountant specialising in farm accounting is a helpful starting point to explain the situation.
Inheritances and gifts: New Zealand abolished estate duty in the 1990s and gift duty in 2011. There is no inheritance tax, and inheriting assets does not itself trigger tax.
The family bach and other assets: A holiday home is not your main home, so a sale within the bright-line window can be taxable. Personal items like cars, boats and furniture are not subject to any gains tax (as they usually lose value given they're depreciating assets in almost every circumstance).
Cryptocurrency: Inland Revenue treats cryptoassets as property, and its starting position is that most people buy crypto for the purpose of selling or exchanging it. That makes gains taxable as ordinary income for most holders - one of the stricter approaches in the developed world, and stricter than many crypto investors realise. You can read more about cryptocurrency asset sales on the IRD's website.
Selling a business: The value of goodwill when you sell a business is generally a non-taxable capital gain - a major difference from Australia and the UK, where business sales attract CGT. Parts of a sale are still taxable, including depreciation recovered on assets sold above book value, trading stock, and payments for a restraint of trade. If a company sells its assets, getting the cash out to shareholders tax-effectively has its own rules. If you're selling a business, a tax accountant is a helpful starting point to explain the situation.
Selling a farm: Similar principles apply - the land itself is usually a capital asset, but livestock, depreciation recovery and other components of the sale price have their own tax treatment, and farms bought with resale intentions or subdivided can be taxable. If you're selling a farm, a tax accountant specialising in farm accounting is a helpful starting point to explain the situation.
Inheritances and gifts: New Zealand abolished estate duty in the 1990s and gift duty in 2011. There is no inheritance tax, and inheriting assets does not itself trigger tax.
The family bach and other assets: A holiday home is not your main home, so a sale within the bright-line window can be taxable. Personal items like cars, boats and furniture are not subject to any gains tax (as they usually lose value given they're depreciating assets in almost every circumstance).
Why is Everyone Talking About Capital Gains Taxes in 2026?
Three reasons:
Important - Nothing has changed (yet):
- The election is on Saturday 7 November 2026, and for the first time since 2019, a major party is campaigning on a capital gains tax rather than ruling one out.
- Labour has made a CGT the centrepiece of its tax policy, proposing a targeted 28% tax on gains from residential investment property and commercial property, with the revenue ring-fenced to fund health initiatives it proposes.
- The wider tax debate has broadened. The Green Party has released a package that includes extending the bright-line test to 10 years and introducing taxes on significant wealth and large inheritances, while National, ACT and NZ First oppose introducing a CGT. Superannuation affordability, government debt, and the cost of health care are all feeding the same conversation: how should New Zealand raise revenue, and who should pay more tax?
Important - Nothing has changed (yet):
- A campaign policy is not law.
- Whatever happens on 7 November, any capital gains tax would need to survive coalition negotiations, be drafted into legislation, pass through Parliament and select committee, and come into force on a future date.
- Under MMP, the final shape of any policy can differ from what was announced during the campaign - broader, narrower, or not proceeding at all.
What Each Political Party Proposes (2026 Election)
Below is a neutral summary of where each parliamentary party stands on taxing capital gains, based on public announcements as at August 2026. Positions are paraphrased - follow the links on each party's website for full policy detail, and expect refinements during the campaign.
| Party | Position on a CGT | Key detail, as announced |
|---|---|---|
| Labour | Proposes a targeted CGT | Flat 28% on profits from selling residential investment property and commercial property; gains after 1 July 2027 only; excludes the family home, farms, KiwiSaver, shares, businesses and inheritances; revenue ring-fenced for health, including three free GP visits a year (Medicard). |
| National | Opposes a CGT | Has campaigned against Labour's proposal; returned the bright-line test to 2 years in 2024; election focus on other areas, including signalling future changes to the NZ Super age. |
| Green Party | Supports taxing capital more broadly | Package includes extending the bright-line test to 10 years, removing interest deductibility for residential landlords, and new taxes on significant wealth and large inheritances. |
| ACT | Opposes a CGT | Argues the issue is government spending rather than under-taxation; strongly critical of Labour's proposal. |
| NZ First | Opposes a CGT | Long-standing opposition - NZ First's stance ended the 2019 CGT proposal; opposes the current policy. |
| Te Pāti Māori | Supports taxing wealth and capital more heavily | Has previously campaigned on a wealth tax and shifting more of the tax burden onto capital and wealth. |
Neutral summary of public announcements as at August 2026. Policies can change during the campaign and in coalition negotiations - check each party's website for current policy. MoneyHub is non-political and does not endorse any party or policy.
Further details:
Know This: If no single party can govern alone - the usual outcome under MMP - tax policy becomes a negotiation. A Labour-led government would likely need Green support, and the two parties propose different things. A National-led government's position could be shaped by its coalition partners. In summary, nothing is clear and won't be for some time.
- Labour proposes a targeted 28% capital gains tax on profits from selling residential investment property and commercial property, applying to gains made after 1 July 2027. The family home, farms, KiwiSaver, shares, businesses and inheritances are excluded. Labour says nine in ten New Zealanders would not pay it, and that all revenue would be ring-fenced for health, including three free GP visits a year through its Medicard policy.
- National opposes introducing a capital gains tax and has campaigned against Labour's proposal. Its retirement and tax focus for this election has centred elsewhere, including signalling a policy to lift the NZ Super age in future decades.
- The Green Party has released a broader tax package that would extend the bright-line test to 10 years, remove interest deductibility for residential landlords, and introduce new taxes on significant wealth and large inheritances - going further than Labour's property-only CGT.
- ACT opposes a capital gains tax, arguing New Zealand's problem is spending rather than under-taxation, and has been strongly critical of Labour's proposal.
- NZ First has historically opposed a capital gains tax - it was NZ First's opposition that ended the 2019 CGT proposal - and opposes Labour's current policy.
- Te Pāti Māori has previously campaigned on taxing wealth and capital more heavily, including a wealth tax, and broadly supports shifting more of the tax burden onto capital.
Know This: If no single party can govern alone - the usual outcome under MMP - tax policy becomes a negotiation. A Labour-led government would likely need Green support, and the two parties propose different things. A National-led government's position could be shaped by its coalition partners. In summary, nothing is clear and won't be for some time.
How Labour's Proposed CGT Would Work - With Examples
Because Labour's policy is the specific CGT proposal getting media attention this election, it is worth understanding mechanically. Everything below describes a proposal, not law, and several design details would only be settled in legislation.
The key features, as announced:
Worked example 1 - an existing rental:
Worked example 2 - never selling:
Worked example 3 - the family home:
Worked example 4 - a commercial building:
Important: Announced policies leave gaps that legislation would need to fill. Open questions commentators have raised include:
The proposal also taxes nominal gains - there is no inflation adjustment, so in a high-inflation period an owner could pay tax on a gain that is partly or wholly inflation.
Warning: Beware of anyone giving you confident answers about how a proposed tax will treat your specific situation. Until legislation exists, nobody - including politicians, commentators or this guide - can tell you precisely how edge cases would work. If a CGT proceeds after the election, detailed rules will emerge through the legislative process during 2027.
The key features, as announced:
- What is taxed: Profits from selling residential investment property and commercial property.
- What is excluded: The family home, farms, KiwiSaver, shares, businesses and inheritances.
- The rate: A flat 28% - deliberately aligned with the company tax rate.
- The start date: Only gains made after 1 July 2027 would be taxed. Existing owners would effectively have their property revalued as at that date ("valuation day"), and tax would apply to growth above the higher of the purchase price or that valuation.
- When you pay: Only when you sell (realisation basis). There is no annual tax on paper gains.
- Where the money goes: Labour says the revenue is ring-fenced for health, funding the Medicard's three free GP visits per year.
Worked example 1 - an existing rental:
- Sarah bought a rental in 2016 for $500,000.
- The CGT policy becomes law, and the property is worth $850,000 on 1 July 2027.
- She sells in 2031 for $1,000,000. The $350,000 of growth before valuation day is not taxed.
- The taxable gain is $1,000,000 minus $850,000 = $150,000, less eligible costs. At 28%, the capital gains tax she has to pay to the IRD is up to $42,000.
Worked example 2 - never selling:
- Mike owns a commercial unit that keeps rising in value, but he never sells it.
- Under the proposal as announced, he pays no CGT - the tax only triggers on sale.
- His rental income remains taxable as normal, as it is today.
Worked example 3 - the family home:
- The Chens sell the home they live in for $400,000 more than they paid.
- Under the proposal, no CGT applies - the family home is excluded, as it is under the current bright-line test.
Worked example 4 - a commercial building:
- Anil bought a motel in 2020 for $1,500,000.
- The CGT policy becomes law, and the property is worth $1,850,000 on 1 July 2027.
- He sells in 2030 for $2,000,000. The $350,000 of growth before valuation day is not taxed.
- The taxable gain is $2,000,000 minus $1,850,000 = $150,000, less eligible costs. At 28%, the capital gains tax he has to pay to the IRD is up to $42,000.
Important: Announced policies leave gaps that legislation would need to fill. Open questions commentators have raised include:
- How losses would be treated
- Whether any rollover relief would apply (for example on death, divorce or restructures)
- How valuation day values would be set and disputed
- How the CGT would interact with the existing bright-line test
- Whether interest deductibility rules would change again
The proposal also taxes nominal gains - there is no inflation adjustment, so in a high-inflation period an owner could pay tax on a gain that is partly or wholly inflation.
Warning: Beware of anyone giving you confident answers about how a proposed tax will treat your specific situation. Until legislation exists, nobody - including politicians, commentators or this guide - can tell you precisely how edge cases would work. If a CGT proceeds after the election, detailed rules will emerge through the legislative process during 2027.
How Other Countries Tax Capital Gains - Australia, UK, US, Singapore and More
New Zealand is an outlier among developed countries in having no comprehensive CGT - most OECD countries have one. But the systems vary enormously - "everyone else taxes gains" isn't accurate and we outline relevant countries and their tax treatment below:
| Country | Comprehensive CGT? | How gains are taxed | Family home | Notable feature |
|---|---|---|---|---|
| New Zealand | No | No general CGT; specific rules tax property sold within 2 years (bright-line), assets bought for resale, traders, most crypto, and overseas shares annually under FIF rules | Excluded | One of the few OECD countries without a comprehensive CGT; FIF rules can tax overseas shares with no sale |
| Australia | Yes | Gains added to income at marginal rates (up to 45% plus Medicare levy); 50% discount for individuals holding over 12 months | Exempt | Applies broadly, including shares; the 50% discount makes holding periods matter |
| United Kingdom | Yes | Separate CGT at 18% (basic rate) or 24% (higher rate) on most assets; £3,000 annual exempt amount | Exempt (private residence relief) | ISAs and pensions shelter gains entirely - where most UK investors hold shares |
| United States | Yes | Long-term gains at 0%, 15% or 20% plus a 3.8% surcharge for higher earners; short-term gains at ordinary income rates | US$250,000 gain excluded (US$500,000 for couples) | Inherited assets get a stepped-up cost basis, erasing unrealised gains at death |
| Canada | Yes | 50% of the gain added to income and taxed at marginal rates | Exempt (principal residence) | A 2024 plan to raise the inclusion rate to two-thirds was cancelled in 2025 before taking effect |
| Singapore | No | No capital gains tax; profits from trading as a business are taxed as income | n/a - no CGT | The absence of CGT is central to Singapore's pitch as a wealth hub |
| Hong Kong | No | No general CGT; trading profits taxed as income | n/a - no CGT | Alongside Singapore and NZ, one of the notable no-CGT jurisdictions |
Simplified comparison as at August 2026 - each system has exemptions, thresholds and edge cases beyond this summary. Rates and rules change; verify before relying on any figure for a specific transaction.
Further details help explain key countries' capital gain tax laws:
Australia
United Kingdom:
Singapore
Know This: If New Zealand adopted Labour's proposal, it would still have one of the narrower capital gains taxes in the developed world - property only, with shares, businesses and farms excluded - closer to a "bright-line test with no time limit" than to the broad systems in Australia, the UK, the US or Canada. Equally, New Zealand today is not quite the tax-free haven for gains that it is sometimes described as, given the bright-line test, the trading rules and the FIF regime.
Australia
- Capital gains are added to your income and taxed at your marginal rate - but if you hold an asset for more than 12 months, individuals get a 50% discount, so only half the gain is taxed. The family home is exempt.
- Because Australia's top marginal rate is 45% (plus the Medicare levy), a long-held gain is effectively taxed at up to about 23.5% for top earners.
- Australians moving to New Zealand are often surprised our system taxes so few gains; New Zealanders moving to Australia are often surprised how comprehensively theirs applies, including to shares.
United Kingdom:
- The UK runs a separate capital gains tax with flat rates of 18% (for basic-rate taxpayers) and 24% (higher rate), applying to shares, property and most other assets.
- Each person gets a small annual exempt amount of £3,000. The main home is exempt through private residence relief, and assets inside ISAs and pensions are sheltered entirely - which is where most ordinary British investors keep their shares.
Singapore
- There is no capital gains tax at all - one of the reasons Singapore markets itself as a wealth hub.
- As in New Zealand, people who trade assets as a business are taxed on profits as income.
- Hong Kong, for reference, takes the same approach - no general CGT, with trading profits taxed.
Know This: If New Zealand adopted Labour's proposal, it would still have one of the narrower capital gains taxes in the developed world - property only, with shares, businesses and farms excluded - closer to a "bright-line test with no time limit" than to the broad systems in Australia, the UK, the US or Canada. Equally, New Zealand today is not quite the tax-free haven for gains that it is sometimes described as, given the bright-line test, the trading rules and the FIF regime.
Frequently Asked Questions
What is a capital gains tax and how does it work?
It is a tax on the profit made when you sell an asset for more than you paid. In most countries it applies when you sell (not while you hold), excludes the family home, and taxes the gain either at your income tax rate, a discounted rate or a separate flat rate.
How is capital gains tax calculated in New Zealand?
The closest thing to a specific tax is the bright-line test for property sales. If your property sale falls under this, you will pay tax based on your total income, with tax charged at your marginal rate (i.e. 10.50%, 17.50%, 30%, 33% or 39%).
For example, if you earn a salary of $100,000 and make a $400,000 profit from a house sale, you will pay up to 39% tax. This is because the $400,000 is treated as income, so your annual income would be $500,000. Any income above $180,000 per year is taxed at 39%. So the bright-line tax charged would be:
For example, if you earn a salary of $100,000 and make a $400,000 profit from a house sale, you will pay up to 39% tax. This is because the $400,000 is treated as income, so your annual income would be $500,000. Any income above $180,000 per year is taxed at 39%. So the bright-line tax charged would be:
- $80,000 X 33%: $26,400
- $320,000 X 39%: $124,800
- Total = $151,200, or 37.80% of the capital gain
How long do you have to live in a property to avoid capital gains tax in New Zealand?
There is no set number of years - the exclusion is about use, not time. The bright-line test does not apply to the home you live in as your main residence for most of the time you own it. If it stops being your main home - you move overseas, or make another property your main home and rent this one out - the exclusion can be lost for that period, and a repeated pattern of buying and selling can see it denied.
Is there capital gains tax on shares in New Zealand?
Long-term investors in NZ shares (and most listed Australian shares) do not pay tax on gains - only on dividends. Traders, and anyone who buys shares to sell them, pay tax on gains as income. Overseas shareholdings above the FIF threshold are taxed annually on a deemed 5% return under the FIF rules, even if nothing is sold. Our guide to tax on investments has specific detail.
Has New Zealand tried to introduce a capital gains tax before?
Yes, repeatedly - and every attempt has failed or been reversed. For example:
Our View: Tax settings in this area change constantly, and planning around any one of them lasting forever has historically been a mistake.
- Labour campaigned on a CGT in 2011 and 2014 and lost both elections.
- The 2019 Tax Working Group recommended a broad CGT, but coalition partner NZ First opposed it, and Jacinda Ardern ruled one out for as long as she was Prime Minister.
- Chris Hipkins ruled out a CGT and a wealth tax again in 2023, before Labour returned with its targeted property CGT ahead of the 2026 election.
- Meanwhile, the bright-line test - a limited capital gains tax in practice - has moved from 2 years (2015) to 5 (2018) to 10 (2021) and back to 2 (2024).
Our View: Tax settings in this area change constantly, and planning around any one of them lasting forever has historically been a mistake.
Would the family home be taxed?
No party proposes taxing the family home. Labour's CGT excludes it, the current bright-line test excludes it, and every major overseas CGT system exempts the main residence.
Would farms or business sales be taxed under the proposal?
No - Labour's announced policy excludes farms and businesses, along with shares and inheritances. The Green Party's package goes further than Labour's in other areas, so the post-election shape of any tax change would depend on coalition arrangements.
What are the arguments for a capital gains tax?
Supporters argue it is about fairness. For example:
- A nurse pays tax on every dollar of salary while a property investor may pay nothing on large gains.
- Inland Revenue research found the wealthiest families paid a median effective tax rate of about 8.9% when gains were counted, roughly half that of many middle-income households.
- They also argue untaxed property gains pull savings into housing instead of productive businesses, that a CGT broadens the tax base as health and superannuation costs climb, and that most OECD countries already tax capital gains.
What are the arguments against a capital gains tax?
Opponents argue a few points:
- A CGT taxes inflation as well as real gains, encourages owners to hold assets to defer the tax (reducing properties for sale), and creates heavy valuation, record-keeping and compliance costs.
- They also note revenue builds slowly, since only gains after the start date are taxed, and argue taxing landlords' gains discourages rental supply and penalises people who saved for retirement through property.
