Labour Tax Plan — Targeted Capital Gains Tax to Fund Free GP Visits

The Policy: Labour CGT & Medicard Policy — October 2025 →

Labour's central tax policy for the 2026 election is a targeted 28% capital gains tax (CGT) on profits from the sale of residential investment properties and commercial properties, taking effect from 1 July 2027. The family home, farms, KiwiSaver holdings, shares, inherited assets, and personal items are all exempt. Revenue from the CGT is ring-fenced to fund a "Medicard" scheme giving every New Zealander three free GP visits per year. Leader Chris Hipkins has framed the policy as correcting a system that "rewards property speculation instead of the people creating jobs and growing the economy."

The current National-led government introduced income tax threshold adjustments in 2024 which benefited most wage earners. National opposes the CGT and argues Labour's plan would raise costs for businesses that hold property, from small corner dairies to large manufacturers.

What it does:

• Imposes a 28% tax on realised capital gains from residential investment properties and commercial property sold after 1 July 2027 — not retrospective
• Exempts the family home, farms, KiwiSaver, shares, inheritances, and personal items — Labour says nine out of ten New Zealanders will not pay the tax on property they own
• Projects revenue ramping from approximately $100 million in year one (2027-28) to around $1.35 billion by 2030, averaging about $700 million per year across the parliamentary term
• Ring-fences all CGT revenue to fund the "Medicard" scheme — a card issued at birth or residency that entitles holders to three free visits to a GP annually

Where things stand:

Labour's caucus settled on the CGT approach in October 2025 after months of internal debate about whether to pursue a broader wealth tax. The decision was endorsed in a near-unanimous caucus vote. Revenue spokesperson Deborah Russell has emphasised that the CGT is the "only tax policy" Labour is campaigning on, pushing back against National's suggestions that Labour has a hidden broader tax agenda.

Labour has explicitly ruled out a wealth tax, inheritance tax, and higher corporate tax rates — policies proposed by coalition partner the Greens. Hipkins has stated he is confident Labour and the Greens can form a government despite this disagreement, arguing that coalition negotiations always involve both parties compromising. The one Green tax proposal Labour has left open is the question of restoring interest deductibility restrictions on residential investment properties (the landlord tax), with Hipkins saying a final call will come in Labour's full fiscal plan closer to the election.

Critics from both left and right have found the CGT wanting. Finance Minister Nicola Willis called it a "handbrake on the economy" that would hit every business holding property. Property investors have labelled it a "Frankenstein monster" satisfying nobody. Green co-leader Chloe Swarbrick argues the exemptions — particularly for the family home — leave a massive loophole and fail to address the structural unfairness of the tax system. An RNZ-Reid Research poll found 43% of respondents support a CGT on investment properties, 36% oppose it, and 22% are undecided.

Labour's full fiscal plan, including detailed costings for all spending commitments, had not been released as of late June 2026. Hipkins signalled that more policy would come through June and in the months ahead of the November 7, 2026 election.

What to watch:

• Release of Labour's full fiscal plan and costings ahead of the November 2026 election, including final decision on interest deductibility
• Government (National) Budget 2026 response and any further tax policy announcements that Labour may need to respond to before the election