Labour Party leader Chris Hipkins has issued a strong warning that any member found responsible for leaking details of the party’s capital gains tax (CGT) policy will be removed from their position.
Labour has pledged to advocate for a capital gains tax focused solely on property, excluding the family home and farms, to fund three free doctor visits for all New Zealanders.
The tax will be set at 28% and come into effect from July 2027.
Labour announced its policy on Tuesday following a leak of details over the long weekend. While Hipkins said there would be no investigation into the source of the leak, he made it clear that if it emerged someone within the party was responsible for leaking the details, that person would be expelled from the Labour Party.
Based on reports, the anticipated $700 million per year in revenue generated by the tax over the next four years would be specifically “ring-fenced” and allocated solely for health spending.
“Right now, our tax system rewards property speculation instead of the people creating jobs and growing the economy. We will change that,” Hipkins said.
“Our simple, targeted tax changes will make sure those profiting from property pay their fair share, levelling the playing field for Kiwi businesses and innovation.”
Forecasts indicate an initial revenue increase of $100 million in the first year, growing to $385 million in the second year, $965 million in the third year, and reaching $1.35 billion by 2030, averaging about $700 million annually over the four years.
Aside from family homes and farms, the tax would also not apply to KiwiSaver, shares, business assets, inheritances and personal items like cars, boats, art and furniture.
“For example, if two business partners each own 50% of an investment property and it is sold with a net gain of $100,000, each partner pays 28% on their $50,000 share,” the policy document indicated.
“We know that for many New Zealanders, owning a second property has been one of the few reliable ways to get ahead and build security for retirement … none of the gains that they have made so far will be taxed. What these changes do are set better rules for the future and level the playing field for Kiwi businesses.”