2026 General Election: Tax Policy Update

With the 2026 general election approaching and election day set for 7 November, New Zealand’s political parties have been releasing more detail on their tax policies.

Cost of living remains front of mind for New Zealanders. The July 2026 Ipsos Issues Monitor identifies inflation and the cost of living as the country’s most pressing issue, with healthcare and the economy the next two principal concerns.

Against this backdrop, tax policy is again an important part of the election debate. The proposals announced so far reflect markedly different approaches to business investment, the balance between taxation of income, capital and wealth, and retirement savings.

These debates also sit against longer-term questions about the sustainability of New Zealand’s tax base and how the tax system may need to respond to future fiscal pressures - themes recently explored in Inland Revenue’s Long-Term Insights Briefing (LTIB), which we discussed in Tax Tips earlier this year.

In this Tax Tips, we summarise the key tax policies announced to date and consider some of the tax-policy design issues they raise.

This update reflects policy announcements and published policy material available as at 8th September 2026.

Labour, the Green Party, Opportunity, and Te Pāti Māori have released relatively comprehensive tax packages, reflecting different approaches to business investment and the taxation of income, capital and wealth. National has not released an equivalent comprehensive election tax package, although they have been campaigning on a “no new taxes” pledge, while ACT and New Zealand First have announced a number of discrete measures.

Labour was first to announce a key election tax policy in October 2025: a proposed 28% capital gains tax on residential investment and commercial property, with the revenue ring-fenced for health.

More recently, Labour announced a Small Business Action Plan focused on cash flow, compliance costs, and investment. The tax elements would increase the immediate asset write-off threshold from $1,000 to $10,000 for businesses with annual revenue below $10 million and raise the compulsory GST registration threshold from $60,000 to $80,000. Labour proposes to fund the package by removing Investment Boost in its current form.

The Green Party has released a broader package that would shift more of the tax burden towards higher incomes, wealth and larger businesses while reducing personal income tax for most taxpayers. Key proposals include a wealth tax, a Capital Acquisitions Tax on large gifts and inheritances, a higher company tax rate for larger businesses, a bank levy, and a $10,000 personal income tax-free threshold.

Te Pāti Māori’s tax policy includes a $30,000 tax-free threshold, a targeted Kai Credit for people earning $60,000 or less, a wealth tax, land banking and vacant house taxes, stamp duty, an increase in the company tax rate, and additional funding for Inland Revenue and other agencies to address fraud and tax evasion.

Opportunity proposes a wider restructuring of the tax and transfer system through its Tax Reset. Its central proposals include a broadly universal Citizen’s Income, a Land Value Tax, and KiwiSaver 2.0, alongside changes to personal income tax rates.

National is presently campaigning on a "no new taxes" pledge. The current Government’s tax programme, distinct from National’s election platform, has focused on Investment Boost, tax simplification and settings intended to attract and retain capital and talent.

ACT has announced a number of targeted measures, including reversing the cap on donation tax credits, allocating a Local Tourism Dividend to councils from existing revenue sources rather than introducing a bed tax, and changes to the taxation of qualifying digital assets.

PwC view

A broad theme across the policies announced to date is a shift in the balance of who bears the tax burden. Labour, the Green Party, Te Pāti Māori, and Opportunity each place greater weight on taxing property, wealth, land, or higher incomes, although via materially different tax bases and mechanisms. These changes are also linked, to varying degrees, to reductions in tax elsewhere or particular spending commitments.

The choices are not only about who pays, but also how tax support is targeted. Trade-offs are inherent in tax policy design and Labour’s small-business package, replacing a broad-based incentive with measures directed towards smaller businesses, is a clear example. Narrower measures can direct fiscal support towards particular groups but introduce boundaries and cliff-edge effects, while broader incentives generally apply more consistently across businesses and investment decisions but at a higher fiscal cost. Tax certainty is another important consideration. Significant changes to investment incentives, capital taxation, and business tax settings can affect decisions made over long timeframes. While policy settings will change between governments, frequent reversals can increase uncertainty for businesses and investors and make it harder to plan with confidence.

Business investment is one of the clearer areas of difference between the parties, including Labour’s proposal to replace the current broad-based Investment Boost with more targeted support for smaller businesses, while other parties propose company tax changes and more targeted business incentives.

Business investment and small businesses

Investment Boost was introduced in May 2025 and allows businesses to immediately deduct 20% of the cost of qualifying new assets, with depreciation applying to the remaining 80% where the asset is depreciable. It is broadly available regardless of business size and applies to qualifying assets including machinery, equipment and new commercial buildings.

Labour proposes replacing Investment Boost with more targeted support through its Small Business Action Plan. From 1 July 2027, businesses with annual revenue below $10 million would be able to immediately deduct the full cost of eligible assets costing up to $10,000, compared with the current $1,000 low-value asset threshold. Labour estimates approximately 600,000 businesses would be eligible.

PwC view

There is merit in periodically reviewing whether small-business tax thresholds remain appropriately calibrated. Labour’s proposal would bring forward deductions, reduce depreciation compliance for lower-value assets, and may encourage some smaller-scale investment by improving near-term cash flow. It is, however, a different policy lever from Investment Boost: the write-off is likely to be most relevant to relatively modest purchases by smaller businesses, whereas Investment Boost is capable of influencing much larger capital investment decisions. The trade-off is therefore not simply one of fiscal cost, but where in the economy the incentive is most likely to have an effect.

One consideration is the timing of the proposed replacement of Investment Boost, given its relatively recent introduction. Inland Revenue’s December 2025 survey found that investment during 2025 largely reflected existing plans, economic conditions and business needs, while awareness of the regime was relatively limited among small and micro businesses. There is nevertheless some early evidence of behavioural effects: 40% of investing businesses with reasonable awareness of Investment Boost said they had increased investment spending, while 49% of businesses intending to invest over the following five years expected it to have a positive effect on their plans.

This highlights the importance of certainty and stability in investment settings. Significant projects can have long lead times, and changing an incentive shortly after introduction can make both investment planning and evaluation of the policy more difficult.

Corporate tax and other business measures

The Green Party proposes increasing the company tax rate from 28% to 33% for companies with annual turnover above $30 million, while retaining the 28% rate for smaller businesses. The Green Party estimates around 0.7% of businesses would be subject to its higher rate. Te Pāti Māori proposes increasing the company tax rate to 33% for all companies.

The Green Party also proposes an annual levy of 0.06% on the total liabilities of banks with more than $100 billion in liabilities, together with a 5% withholding tax measure aimed at certain service and licence fees paid offshore by large technology companies. Te Pāti Māori proposes a broader 5% International Profit Transfer Tax on the value of profits transferred offshore.

Opportunity’s Breakthrough Economy package includes a tax credit for technology adoption, wider access to the Research and Development Tax Incentive, and tax deductibility for investment in its proposed Impact Company structure.

PwC view

Under New Zealand’s imputation regime, company tax is generally a prepayment of tax for domestic shareholders to the extent imputation credits can be used, but can represent a more significant final New Zealand tax cost for non-resident investors. This matters particularly for New Zealand, which relies heavily on foreign capital to fund business investment, infrastructure and economic growth. Changes to the company tax rate therefore need to be considered not only in terms of revenue, but also their potential effect on New Zealand’s ability to compete internationally for capital.

New Zealand’s 28% company tax rate is above the 2026 OECD-member average of 24.2%, as well as Singapore’s 17% rate and Australia’s 25% rate for qualifying base rate entities with aggregated turnover below AUD50 million. Increasing the rate further would widen that differential and could increase the required pre-tax return for foreign investors considering New Zealand investments relative to competing jurisdictions.

The Green Party’s proposed $30 million turnover threshold would also create a new boundary within the company tax system. Detailed design would need to address group treatment and whether different rates could influence entity structures or the allocation of activities between entities.

For business incentives more generally, including Opportunity’s technology and R&D measures, a key consideration is additionality — whether the incentive generates activity that would not otherwise have occurred — and how it interacts with existing measures. Similarly, the Green Party’s proposed 5% withholding tax measure for certain offshore service and licence payments, and Te Pāti Māori’s proposed 5% tax on profits transferred offshore require further detail on scope, domestic-law characterisation and interaction with New Zealand’s double tax agreements.

Labour proposes a targeted CGT on residential investment and commercial property. The proposed 28% tax would apply to realisation of gains arising after 1 July 2027, with an opening valuation at that date so earlier gains are not taxed. Labour does not propose inflation indexation.

The family home, farms, shares, KiwiSaver, businesses, business assets, and inheritances would be excluded, although commercial property owned or used by a business would generally remain within scope.

For business owners and investors, key design features include deductibility of acquisition costs and capital improvements, but not holding costs such as interest and rates; ring-fencing of capital losses; allocation of consideration where a business and its commercial premises are sold together; application to non-residents on New Zealand-sourced gains; and rollover treatment for certain transfers where there is no substantive change in ownership.

PwC view

Labour’s proposal is considerably narrower than the recommendations of the 2018–19 Tax Working Group, which was established by the then Government to review the structure, fairness and balance of New Zealand’s tax system. A majority of the Group recommended a broad, realisation-based capital gains tax, while the minority favoured a more incremental approach. The minority considered there was a clearer case for extending taxation to residential investment property while avoiding a broad CGT on business assets and shares. Labour’s proposal is closer to that minority approach, although it goes further by also including commercial property.

A narrower approach limits the number of assets and taxpayers subject to tax, but creates different treatment across investment types. This makes boundaries and associated integrity rules particularly important, including where a business and its premises are sold together, and consideration needs to be allocated between the taxable property and underlying business.

The commencement date also creates a significant one-off valuation issue. Property held at 1 July 2027 would require an opening value so only subsequent gains are taxed. The design will need to balance robust valuation rules against potentially significant compliance costs. The interaction with New Zealand’s existing land-sale rules will also need to be clear.

The Green Party and Te Pāti Māori both propose taxes on net wealth, although with materially different thresholds and structures. The Green Party also proposes a separate tax on large gifts and inheritances.

The Green Party proposes an annual 2.5% tax on net assets above $10 million for an individual, with the family home excluded. The Party estimates the tax would apply to around 0.3% of New Zealanders. Its policy also includes exclusions for specified Māori, charitable and public-benefit assets and rules for wealth held through trusts.

The Green Party also proposes a 33% Capital Acquisitions Tax on gifts and inheritances above $1 million, generally payable by the recipient, with family homes and family farms exempt.

Te Pāti Māori proposes a lower entry threshold but progressive rates:

Te Pāti Māori states its wealth tax would affect around 3% of people, who have average net wealth of approximately $6 million. The policy currently provides relatively limited detail on valuation, debt, trusts and entities, and how the rate bands would operate.

PwC view

Wealth taxes can broaden the tax base and increase progressivity, but raise significant design and administration issues. Unlike a realisation-based CGT, an annual wealth tax requires repeated valuation of assets and liabilities, which can be particularly difficult for privately held businesses, start-ups and other illiquid assets.

International experience illustrates some of these challenges. Recurrent net wealth taxes have become less common across OECD countries over time, with a number of countries removing them amid concerns about administration, efficiency and relatively limited revenue collection. Exemptions and preferential valuation rules can also narrow the base and create integrity issues.

Capital mobility is another consideration. Inland Revenue’s LTIB notes that international evidence on migration responses is limited, but identifies a reasonable risk that a significant wealth tax could affect decisions by very wealthy residents and prospective migrants. The Green Party’s Capital Acquisitions Tax raises additional questions around valuation, exemptions, timing and aggregation of transfers. 

Overall, the design of these taxes would need to balance revenue and distributional objectives against compliance costs, liquidity constraints, and behavioural responses.

Changes to personal income tax feature in several parties’ policies, ranging from tax-free thresholds and changes to marginal rates through to broader reform of the tax and transfer system.

The Green Party proposes a $10,000 tax-free threshold together with wider changes to personal rates and a new 45% rate on income of $160,000 and above, detailed below:

Te Pāti Māori proposes a $30,000 tax-free threshold and the following rates:

Opportunity proposes replacing the current income tax scale with rates of 28% up to $50,000, 34% from $50,001 to $200,000 and 39% above $200,000. It also proposes a broadly universal, tax-free Citizen’s Income of $19,400 a year for eligible New Zealand residents aged 18 and over, alongside wider reform of transfer payments.

PwC view

Personal income tax changes should be considered as part of the wider tax and transfer system rather than in isolation. Tax-free thresholds are relatively simple but are not tightly targeted as anyone earning above the threshold receives the full benefit, while Opportunity’s Citizen’s Income illustrates a different approach to combining tax and transfer settings. 

The Tax Working Group preferred increasing the bottom tax threshold to introducing a tax-free threshold, while Treasury and Inland Revenue have similarly noted that transfers can be more cost-effective where the objective is to support persistently low-income households.

Higher marginal rates raise different considerations. A wider gap between personal and company tax rates can increase the importance of integrity rules and incentives around the timing or form in which income is derived. Personal tax settings can also influence decisions by highly mobile skilled workers, entrepreneurs and senior executives, although tax is only one factor in those decisions.

Opportunity proposes an annual Land Value Tax of 1.75% on urban land and 0.5% on rural land, applying to land value rather than buildings or improvements. Its policy includes specified exemptions for Māori, conservation and public-purpose land, and deferral mechanisms for some asset-rich but cash-poor landowners, including retirees and farmers.

The Green Party proposes removing interest deductibility for residential investment property and restoring the bright-line period to 10 years, reversing the current Government’s recent changes to those settings.

Te Pāti Māori proposes a 33% Land Banking Tax, a 2% Vacant House Tax and a 5% Stamp Duty on residential sales, with an exemption for first-home buyers purchasing homes under $1 million.

PwC view

Land taxes are generally regarded as relatively efficient because the supply of land is fixed and land cannot relocate in response to tax. The principal design issues are incidence, liquidity, and transition, including cash-flow pressures for asset-rich but cash-poor owners.

Te Pāti Māori’s land banking and vacant house taxes raise different questions, particularly how ‘land banking’ and ‘vacancy’ would be defined and how unintended impacts on genuine development or temporary vacancies would be avoided.

Labour proposes increasing the compulsory GST registration threshold from $60,000 to $80,000 from 1 July 2028 and estimates around 35,000 businesses currently between those thresholds would no longer be required to register.

Te Pāti Māori proposes a targeted income tax Kai Credit for people earning $60,000 or less, representing the value of GST on kai, rather than changing the GST base or rate.

PwC view

There is merit in periodically reviewing whether tax thresholds remain appropriately calibrated. A higher GST registration threshold would reduce compulsory compliance for businesses below it, but also creates boundary effects around the point of registration, particularly for consumer-facing businesses.

Importantly, neither proposal would narrow New Zealand’s broad GST base, which remains a key strength of the tax system.

National, New Zealand First, and Opportunity each propose greater participation in retirement saving and higher contribution rates.

National proposes making KiwiSaver compulsory for workers from 1 July 2028 and progressively increasing default employer and employee contributions to 6% each by 2032. It also proposes automatic enrolment of newborns with a $1,500 Baby Boost and other changes to Government and employer contributions.

New Zealand First also proposes compulsory KiwiSaver, including automatic enrolment at birth with a $1,000 Crown contribution for New Zealand citizens, and higher total employee and employer contribution rates.

Opportunity’s KiwiSaver 2.0 would introduce a separate compulsory retirement savings system, with employer and employee contributions progressively increasing to 6% each. Compulsory contributions would be tax-exempt, and tax on fund income would be progressively reduced, with full exemption proposed after 20 years.

PwC view

From a tax-policy perspective, the key issues are the tax treatment of contributions and investment returns, the fiscal cost and effectiveness of Government incentives, and whether the settings generate additional saving rather than simply changing how existing savings are held.

Higher compulsory employee contributions may also affect take-home pay and remuneration costs, while a larger domestic savings pool could support investment and capital formation.

Across the policies announced to date, some parties are proposing quite substantial changes to the structure of the tax system rather than incremental adjustments at the margins. These include new taxes on capital, wealth and land, material changes to personal and company tax rates, and significant changes to investment incentives and transfer payments. That increases the importance of considering not only immediate distributional and revenue effects, but also implementation complexity, behavioural responses, transition costs, and the stability of the tax system.

These choices also need to be considered against New Zealand’s longer-term fiscal position. Tax reductions, new spending commitments and changes to the tax mix will need to be sustainable over time, particularly given the fiscal pressures associated with an ageing population and rising health and superannuation costs. This places a premium on tax settings that are coherent, economically efficient, and sufficiently flexible to respond to changing revenue needs.

For businesses and investors, certainty is also critical. Tax settings inevitably change as governments change, but frequent reversals in significant policy settings can increase uncertainty and make long-term investment decisions more difficult. Where possible, greater cross-party durability around core elements of the tax system can support confidence, reduce transition costs, and allow businesses to plan with a clearer view of the rules that are likely to apply over the life of an investment.