NEW ZEALAND Trends and Developments Contributed by: Greg Neill, Fred Ward and Callum Burnett, Russell McVeagh
Capital taxation is therefore already an established feature of the current tax system. Against this backdrop, New Zealand’s Labour Party has confirmed that it will campaign on a form of tar - geted capital gains tax, applying only to gains made on the disposal of residential and commercial invest - ment properties (ie, real property). The proposal seeks to exclude all other asset classes including the family home, farms, and personal property such as KiwiSaver (a form of national retirement savings account), shares and business assets. It is intended to only apply to gains realised after 1 July 2027. Notably, these gains will be taxed at a rate of 28%, aligning with the current company tax rate and the rate at which New Zea - land resident individuals are taxed on investments in “portfolio investment entities” (generally, widely held investment vehicles). This proposal signals that tax settings – particularly those affecting investment assets – are likely to remain a point of focus throughout the election cycle. At the time of writing, detailed tax policy positions have yet to be released by other political parties, including those forming the current coalition Government. Not-for-profit sector Alongside broader political discussion, Inland Reve - nue has continued its programme of targeted engage - ment on specific sectors. In November 2025, Inland Revenue commenced targeted consultation on the not‑for‑profit sector, following earlier rounds of public consultation held throughout 2025. At present, New Zealand’s not-for-profit and charitable sectors enjoy considerable support through the tax system, includ - ing in the form of income tax exemptions for charitable entities, donation tax credits for donors who make donations and GST concessions for certain non-profit bodies. Inland Revenue’s consultation is part of a review to determine the effectiveness of these concessions. It focuses on three areas: (1) the effectiveness of the charities business income tax exemption, (2) the development of a new regime for donor-controlled charities, and (3) a range of integrity and simplifica - tion measures for not-for-profits.
Inland Revenue has indicated that it intends to review submissions by early 2026, with the purpose of ensur - ing that the tax settings for the sector remain aligned with their underlying policy objectives and continue to support coherence within the wider tax system. This review follows extensive engagement during earlier consultation phases, including proposals that were subsequently scaled back following public and sector- wide feedback. Given that context, and the proximity to the election, further reform in this area may prove politically sensitive and it remains uncertain whether substantive changes will be progressed in the near future. International Tax Landscape New Zealand’s international tax settings have contin - ued to develop through the course of the year, reflect - ing a combination of targeted domestic policy priori - ties and engagement with international initiatives. At the same time, the Government has emphasised the importance of preserving overall stability and coher - ence in the cross‑border tax framework, with a focus on supporting investment, enhancing transparency and remaining aligned with global standards. Updates to New Zealand’s DTA network As set out in the Government’s Tax and Social Policy Work Programme, New Zealand remains active in expanding and updating its double tax agreement (DTA) network with its key trading partners, and is cur - rently negotiating a number of DTAs and Protocols with new and existing counterparty jurisdictions. As at early 2026, work is underway on a series of replacement DTAs with Australia, Fiji, the Netherlands and the United Kingdom, alongside negotiations for new agreements with Hungary, Portugal and Slove - nia. Updated protocols are also being negotiated with Germany and South Korea, reflecting a broader pro - gramme to ensure that New Zealand’s treaty settings continue to support its trade and investment relation - ships. In addition, New Zealand has signed but not yet brought into force DTAs with Croatia and Iceland. A Second DTA Protocol with Belgium is also signed but is not yet in force, together with tax information exchange agreements with Bermuda and St Kitts &
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