New Zealand faces growing demands on government spending over the coming years. An ageing population, healthcare costs and infrastructure needs will all put pressure on public finances.

Our view is that these pressures will create increasing demand for tax revenue. Economic growth and better use of public money can help, but the debate about how much tax we collect, and who pays it, is unlikely to go away.

That makes the design of our tax system increasingly important.

What makes a good tax system?

The principles are hardly new. In The Wealth of Nations, published in 1776, Adam Smith identified four principles of taxation. In modern terms, these are:

• Fairness: People should contribute according to their ability.
• Certainty: People should understand what they owe, when it is payable and how it is calculated.
• Convenience: Payment should be arranged in a way that works reasonably for taxpayers.
• Economy: Taxes should minimise unnecessary collection costs, compliance burdens and disruption to economic activity.

We would also like to see the overall tax burden kept to the minimum necessary, supported by effective public spending.

These principles provide a useful way to assess election promises. The rates matter, but so do the practical details: who pays, when they pay, and how much work is required to calculate and collect the tax.

What are the parties proposing?

The following overview covers selected proposals announced as at 15 October 2026. Parties appear in descending order of support in the latest published 1News Verian poll, released on 13 October, with tied parties listed alphabetically. The order does not indicate a preference or endorsement.

These are election policies. Implementation would depend on the election outcome, coalition negotiations and legislation.

Labour: Capital gains tax on property

Labour proposes a 28% tax on gains arising after 1 July 2027 when residential investment or commercial property is sold.

The proposed tax would exclude the family home, farms, shares, KiwiSaver and businesses themselves. Relief is also proposed for small businesses selling their premises to purchase larger premises.

For business owners, the distinction between the business and its premises matters. If you own a medical practice, law firm or other business together with its building, a future sale of the building could be caught even where the business sale falls outside the proposed tax.

The starting valuation, allowable costs and available relief would all affect the eventual liability.

National: No new taxes

National has committed to introducing no new taxes if re-elected. This would rule out a new wealth or capital gains tax under that commitment, although it should not be read as a guarantee that every existing tax rule or threshold would remain unchanged.

For business owners and investors, this signals greater continuity in the overall tax framework.

Green Party: Income, wealth and inheritance taxes

The Green Party proposes:

• A tax-free threshold for the first $10,000 of income, revised brackets and a 45% marginal rate on income above $160,000.
• An annual 2.5% tax on net wealth above $10 million per person, excluding the family home.
• A 33% tax on taxable gifts and inheritances above $1 million, with exemptions including family homes and family farms.
• A company tax rate of 33% for companies with annual turnover exceeding $30 million, while smaller companies remain at 28%.
• Removing residential investment property interest deductions and restoring the ten-year bright-line test.

Higher-earning professionals could face a larger income tax bill. Owners with substantial assets would also need to consider the wealth tax and the implications for transferring assets to the next generation.

Rental owners would need to assess the annual cash flow effect of losing interest deductions as well as the tax consequences of a future sale.

ACT: No new taxes and targeted changes

ACT also campaigns on no new taxes. Its current fiscal plan includes removing tax on qualifying KiwiSaver investment earnings while discontinuing the government contribution, and returning net Emissions Trading Scheme auction revenue through a Carbon Tax Refund.

Its digital economy policy proposes a twelve-month bright-line rule for qualifying personal digital investments and an exemption for low-value purchases made using digital assets. Professional traders and businesses would continue to be taxed under existing rules.

For clients holding cryptocurrency or other digital investments, the eligibility criteria would matter. These proposals should not be treated as exemptions that already apply.

New Zealand First: Lower company tax

New Zealand First proposes reducing company tax from 28% to 20% for companies with annual turnover below $30 million.

An eligible company retaining $100,000 of taxable profit would pay $8,000 less company tax, leaving more cash available for reinvestment or debt repayment.

However, company tax is only part of the picture. Under the current imputation system, company tax can be credited against shareholders’ tax on dividends. A lower company tax rate would therefore not necessarily produce the same final saving for owners once profits are distributed.

Opportunity: Land value tax and a Citizen’s Income

Opportunity proposes a wider tax reset combining a Citizen’s Income, revised income tax brackets and an annual land value tax.

The headline land-tax rate is 1.75% for urban land, calculated on land value rather than the combined value of land and buildings. Its transition plan proposes starting at 0.5% on urban land and introducing the package gradually, with lower rural rates and some exemptions and deferrals.

For owners of business premises, rental property or their own home, this could create an annual cost without a sale taking place.

The overall household effect would need to be assessed alongside the Citizen’s Income and other changes. Looking at the land tax alone would not give the full picture.

Te Pāti Māori: A broader tax overhaul

Te Pāti Māori proposes making the first $30,000 of income tax-free, with revised personal tax brackets reaching 48% on income above $300,000.

Its package also includes increasing company tax to 33%, a progressive annual wealth tax starting above $2 million of net wealth, and residential stamp duty, land-banking and vacant-home taxes.

The lower wealth-tax threshold could make this relevant to more business owners with substantial business and investment assets. Valuation rules, debt, exemptions and ownership arrangements would be important in assessing the effect.

What about charities and other not-for-profits?

There are also points relevant to charities, incorporated societies and community organisations.

The Green Party’s wealth-tax proposal excludes assets belonging to charities, NGOs and clubs from individuals’ taxable wealth. Opportunity proposes land-tax exemptions for land owned by clubs, societies and non-commercial religious organisations, as well as social housing. Its proposed increases in employer retirement contributions would also matter for NFP staffing budgets.

Separately, Budget 2026 announced charity and NFP tax proposals, including increasing the net-income exemption for taxable NFPs from $1,000 to $10,000 and allowing donors to transfer their donation tax credit directly to a charity. These are separate from the election promises, with implementation announced for various dates in 2027 and 2028.

What should you consider?

Smith’s principles remain useful because the practical consequences of a tax often extend beyond its rate.

An annual wealth tax may require regular valuations of privately owned businesses. A land tax can create a payment obligation without generating cash to fund it. A capital gains tax raises questions about starting values, improvements and exemptions. Each involves choices about fairness, certainty and compliance costs.

For business owners, the business and household position also need to be considered together. A company tax reduction may have a different effect depending on whether profits are reinvested or paid out to shareholders.

If you are considering a business sale, property purchase, family asset transfer or substantial investment, understanding the possible outcomes can help with your planning. There is no need to rush a transaction solely because of an election announcement.

At The Accounting Hub, we can help you work through what the proposals could mean for your business, investments and cash flow.