Labour Confirms Capital Gains Tax on Investment Property — No Wealth Tax Planned

Labour has confirmed it will campaign on a narrow capital gains tax (CGT) focused solely on property — excluding the family home and farms — as part of a new health policy promising three free GP visits for everyone.

The decision, announced Tuesday morning, follows months of internal debate over whether to pursue a wealth tax or a CGT. RNZ reports the plan was approved by Labour’s caucus in a near-unanimous vote, effectively settling a long-running policy divide within the party.

Under the proposal, profits from property sales (other than family homes and farms) would be taxed at 28 percent, beginning July 2027, and would not apply retrospectively.

The ‘Medicard’ Scheme

Revenue from the new tax would fund a universal “Medicard” programme, giving all New Zealanders three free doctor visits each year. The card would be issued at birth or upon gaining residency or citizenship, integrated into existing GP systems to track usage and entitlements.

Public Support and Political Context

A recent RNZ-Reid Research poll found 43% support for a capital gains tax on investment properties, with 36% opposed and 22% undecided — indicating mixed but growing acceptance among voters.

Labour’s move represents a significant policy shift after leader Chris Hipkins ruled out both a CGT and wealth tax before the 2023 election — a stance that prompted then–Revenue Minister David Parker to resign in protest. Following Labour’s defeat, Hipkins declared all tax options “back on the table,” later signalling a clear preference for a CGT over a wealth tax.

At Labour’s most recent party conference, members agreed to keep both options under review, leaving the final call to the caucus and policy council — who have now sided firmly with the CGT path.

A Decade-Long Battle Over CGT

Labour’s history with capital gains tax has been long and politically fraught.

• Phil Goff (2011) and David Cunliffe (2014) both proposed versions that failed to win over voters.

• Jacinda Ardern (2019) abandoned a broader CGT after coalition partner NZ First refused to back it, later promising never to revisit the idea while leader.

Hipkins’ new approach narrows the scope significantly, targeting only property investment while linking the tax directly to a tangible healthcare benefit — a move insiders hope will make it more politically palatable.

Rebuilding Policy Direction

The CGT announcement is part of a broader attempt by Hipkins to reset Labour’s policy agenda after criticism from National that the party lacked fresh ideas since losing power.

In recent weeks, Labour has rolled out several new proposals, including a “Future Fund” for long-term investment, an expansion of video-game industry subsidies, and a new GP funding model — though the latter was poorly received after Hipkins mishandled media questions.

Opposition Response

Deputy Prime Minister and ACT leader David Seymour was quick to condemn the new tax, calling it “divisive” and unnecessary.

“New Zealand already collects a higher percentage of tax revenue than the average OECD country,” he told First Up. “This isn’t about a lack of government revenue — it’s about the old tall poppy syndrome.”

Seymour accused Labour of trying to solve problems by “finding a new group to tax or punish every few years.”

Despite political backlash, Labour hopes the targeted CGT — tied to a universal, visible health benefit — will strike a balance between fiscal responsibility and fairness, offering a clear, campaign-ready contrast to National’s current tax stance.