For over a decade now, one of the most contentious issues in New Zealand politics has been the capital gains tax (CGT). All bar a handful of the OECD’s 38 members have a CGT, and even those that don’t will still tax capital gains – the income made from selling assets – more thoroughly than New Zealand does. 

The Green Party have long proposed a CGT, and it has been Labour Party policy on and off since 2011. For the 2026 election, Labour is proposing a stripped-down version, taxing only the gains made on residential property investment.

Strong claims are made both in favour of and against a CGT. Proponents argue that, by reducing the profits to be made selling assets like rental properties, it will lower house prices and help reduce New Zealand’s over investment in real estate. They also argue that a CGT will increase the equity of the tax system, as tax is already paid on other kinds of income.

On the other side, opponents argue that it will be harmful to the economy, as it will reduce the returns made by those investing in assets and discourage entrepreneurship. They also argue it will add complexity to the tax system, and its actual impacts may be felt by those who are not well-off – for instance, renters.

IDEA’s research will shed light rather than heat on this debate, surveying the evidence both for and against capital gains taxes in an even-handed manner. By doing so, we hope to help ground the debate over CGT in facts and peer-reviewed research, rather than knee-jerk sloganeering.