Labour proposes a 28 percent capital gains tax on the profit from selling commercial or residential investment property. The family home and farms would be exempt. The policy only applies if Labour forms a government after Saturday's election and Parliament passes the law. National opposes a capital gains tax of this kind.
Details below come from Labour's election policy page.
What would be taxed
Labour says the tax would apply to gains on commercial and residential investment property. It would be charged when the property is sold, not every year.
Only gains that arise after 1 July 2027 would be taxed. Nothing before that date would be included.
What would be exempt
Labour lists these exemptions:
- the family home, including lifestyle blocks used as the family home
- farms
- inheritances
- KiwiSaver
- shares
- businesses
- personal items
Labour also says small businesses that sell their premises to buy a bigger one would not be taxed on that sale under the proposal.
How the gain would be calculated
Labour's example: a commercial property bought in July 2025 for $400,000 is valued at $600,000 on 1 July 2027 and later sold for $700,000. Tax would be calculated on the $100,000 gain after July 2027, not on the earlier rise from $400,000 to $600,000.
For the starting value at 1 July 2027, Labour says the default would be the rateable value on that date. Owners could instead get a registered valuation of the property as at that date before they sell. Costs of improvements could be included if they have not already been depreciated. Losses would be ring-fenced.
What Labour says the money would fund
Labour says revenue would be ring-fenced for health, including three free doctor's visits a year. The party claims nine in 10 New Zealanders would not pay the tax.
What this is not
This is a Labour campaign pledge. It is not current law. Banks, lawyers and accountants should still be asked about today's bright-line and interest-limitation rules if you are buying or selling now.
For buyers focused on their own home rather than investment property, see our coverage of first-home buyers in October 2026 and current mortgage rates.
Sources: Labour Party, Capital gains tax election policy page.