Labour's 28% Capital Gains Tax Calculator
Estimate what Labour's proposed capital gains tax would mean for a property sale, and see how it compares to today's bright-line test. This models an election proposal ahead of the 7 November 2026 general election — not current New Zealand law.
Election proposal — not current law
This models Labour's announced 28% capital gains tax policy, one of several parties' positions ahead of the 7 November 2026 general election. It only applies if Labour forms government and enacts the policy as announced — the figures below are an estimate of that scenario, not a forecast of NZ tax law.
Only the gain after 1 July 2027 is ever taxed — any increase in value before that date is not taxed, however long ago the property was bought.
Improvement costs are deductible under the proposal. Holding costs like rates and interest are not deductible — leave those out.
Under today's law, a sale within 2 years of purchase is taxed under the bright-line test at your marginal income tax rate. Beyond 2 years, the bright-line test does not apply — though other IRD rules (the intention/dealer rules) can still make a gain taxable in some cases.
Standing caveats
This is Labour's proposed policy, not current law. It would only take effect if Labour forms government after the 7 November 2026 election and enacts the CGT as announced.
The exact valuation method for the 1 July 2027 baseline has not yet been specified by Labour — this calculator assumes you supply that figure directly.
Labour's policy documents are reported by media to replace the bright-line test with this CGT, but Labour's own primary materials do not explicitly confirm that mechanic — treat the current-law comparison above as bright-line under today's rules, which may or may not continue to exist alongside a CGT.
How this calculator works
This tool estimates the effect of Labour's proposed, not yet enacted capital gains tax — announced 28 October 2025 as part of the party's 2026 election platform. Read the full mechanics in the Labour CGT 2026 explainer.
- Scope — only residential investment property (incl. holiday homes/baches) and commercial property are in scope. Family home, farms, KiwiSaver, shares, business assets, inheritances and personal items are exempt.
- Valuation day, not grandfathering — every in-scope property is valued as at 1 July 2027, and only the gain from that date forward is ever taxed. Properties bought on or after 1 July 2027 use their purchase price instead.
- Flat 28% rate — applied to the net gain (sale price minus the valuation-day or purchase-price baseline, minus deductible improvement costs). Holding costs like rates and interest are not deductible.
- Losses — carried forward and ring-fenced against future gains on the same type of asset, not against salary or other income.
- Current-law comparison — uses the existing 2-year bright-line test, which taxes the full gain at your marginal income tax rate if the sale falls within 2 years of purchase, and does not apply beyond that (subject to IRD's separate intention/dealer rules). See how the two regimes compare in the Labour CGT vs bright-line test article.
The valuation methodology for the 1 July 2027 baseline has not yet been specified by Labour — this calculator asks you to supply that figure directly, and the result is only as accurate as that estimate.
Frequently asked questions
Is Labour's capital gains tax current law?
No. This is an election proposal announced by the Labour Party on 28 October 2025 ahead of the 7 November 2026 general election. It would only become law if Labour forms government and enacts the policy — as announced or possibly amended in drafting or passage.
What would be taxed under Labour's proposed CGT?
Only residential investment property (including holiday homes/baches that are not the family home) and commercial property. Everything else is exempt, including the family home (including lifestyle blocks), farms, KiwiSaver, shares, business assets, inheritances, and personal items like cars, boats, art and jewellery.
How would the tax be calculated?
A flat 28% on the net gain, but only the gain made after 1 July 2027. Every in-scope property gets a value as at 1 July 2027 (the "valuation day"), and only the increase from that value onward is ever taxed when the property is later sold — not a dollar of profit made before 1 July 2027. Properties bought on or after 1 July 2027 use their purchase price as the baseline instead.
Does this replace the bright-line test?
Labour's own policy PDF and website do not explicitly say so, and media reporting on Labour's policy documents (not independently verified against the primary PDF) suggests the bright-line test would be replaced. Treat that specific claim as reported, not confirmed by Labour's own materials.
What happens if I sell at a loss?
No tax is payable, and the loss can be carried forward to reduce future capital gains — but it's ring-fenced, so it can only offset gains from the same type of asset, not your salary or other income.
Related reading
Labour's 2026 CGT explained
The full policy mechanics, scope, and what's still unspecified.
Labour CGT vs bright-line test
How the proposal would interact with today's 2-year rule.
Bright-line test calculator
Check your property sale against today's current law.
2026 election tax policies compared
A neutral, party-by-party comparison of announced tax positions.
Sources
Figures sourced from Labour CGT policy PDF — Targeted Tax Changes to Grow the Economy and Invest in Health, Labour CGT policy summary page, IRD — the bright-line test (current law).
Published 2 August 2026. Labour's CGT policy was announced 28 October 2025; last verified against primary sources on 2 August 2026. This calculator will be updated if the policy changes before the election.
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