28/10/2026
We ran Labour’s capital gains tax through the Housing Compass. The Compass tests what a policy does to the whole housing system, not just the part it was written to fix.
We asked two things. Does the tax do what Labour says it does? And what would get it closer to what Labour wants?
FOUR LABOUR CLAIMS
- Pay for three free GP visits a year. This partly happens. In its first year the tax brings in $100 million. That’s Labour’s own forecast. The visits are estimated to cost $500 million a year. The visits happen either way. So who covers the gap until the tax catches up? Taxpayers.
- Move money out of property and into New Zealand business. This is unlikely to happen. You only pay the tax when you sell. Hold on and you pay nothing. Labour says the problem is money locked in property. This tax adds another lock.
- Fewer investors bidding against first home buyers. This partly happens. True for houses that already exist. But your deposit doesn’t change. And when landlords hold on, fewer houses come up for sale.
- Rents won’t go up. This hasn’t been tested. It may be right for the rentals we already have. Labour hasn’t looked at new ones. That’s where a rent rise would come from.
WHO THIS AFFECTS
Winners: landlords who hold on. Renters who already have a place. Heirs.
Losers: landlords who sell. Older investors wanting to retire. Builders. And business owners looking for investment, which is Labour’s own aim.
First home buyers land on both sides. Fewer investors bidding against them, but the same deposit and fewer houses for sale.
FOUR SUGGESTIONS
- Settle what happens when someone dies.
- No tax if the money goes into a business.
- A better deal for new builds.
- Take inflation out, so you only tax real profit.
We’ll check our own work in 2028, 2030 and 2032.
Comment CGT for the full report.
