Almost two-thirds of New Zealanders would want any capital gains tax to apply only to real, inflation-adjusted gains, not nominal increases as Labour’s plan is currently proposing.
That’s according to new Taxpayers’ Union-Curia polling, conducted from November 2-6, roughly a month after Labour unveiled its policy on taxing gains made on commercial and residential property by 28%. The family home, KiwiSaver and other commercial assets are excluded.
If Labour were elected at the 2026 general election – and a capital gains tax (CGT) enacted – 61% of respondents would want that policy based only on real, inflation-adjusted gains rather than nominal profit (39% of respondents preferred not adjusted for inflation).
A nominal gain on a property will almost always be greater than a real gain, which considers the impact of inflation. So, if someone bought a property for $1 million and sold it for $1.1m, the nominal gain would be $100,000, or 10%. But if there was 10% inflation over that time, the real gain would be zero.
It comes a week after a New Zealand Herald-Kantar poll showed the country was split down the middle on the idea of a CGT policy overall. Both sides had 39% of respondents behind them.
Labour says “every dollar raised” from the policy, which applies from July 2027, would go to the country’s struggling health system, including funding three free GP visits for all New Zealanders.
Labour ran on a CGT policy at the 2011 and 2014 elections, losing both times. Running on it again was widely seen to be a political risk.
This latest Taxpayers’ Union-Curia poll, released exclusively to the Herald today, shows if a policy were enacted, support for taxing real gains was highest among Labour supporters.
Labour leader Chris Hipkins said the party had not considered accounting for inflation.
“What we’re doing is only making it prospective; it will only apply to gains made in the future, not any gains that have already been made.”
Hipkins would not comment on the results of the poll directly as he had not seen the question at the time the Herald sought comment from him.
“Depending on how you ask the question would very much depend on the nature of the answers that you get. The National Party has been scaremongering about Labour’s capital gains tax, telling outright lies about it.”
(Respondents were asked: Do you think any capital gains tax should levy tax on the nominal gain made by selling an asset, or levy it on the inflation-adjusted real gain?)
Some 69% said a CGT should apply only to real gains, compared to 31% who say it should also apply to nominal gains.
This compares with 55% of Green voters, 55% of Act voters and 48% of New Zealand First voters who supported a CGT based on real, not nominal gains.
This trend was somewhat similar between genders and age brackets. Across the regions, all groups preferred taxing real over nominal gains but the difference was the narrowest in Auckland, where 52% said real gains versus 48% wanting nominal gains taxed if a policy were enacted.
Taxpayers’ Union spokesman James Ross said more than half of the capital gains on housing over the past 10 years had just been inflation, largely caused by Government overspending.
“After a year of workshopping, Labour have somehow produced a new tax that even their own voters know is wildly unfair.
“Most people can clearly see that causing inflation, then taxing people for it, simply isn’t fair.”
Based on a sample of 1,000 respondents, the maximum sampling error (for a result of 50%) is +/- 3.1%, at the 95% confidence level. Results for sub-groups such as age and area will have a much higher margin of error.
Julia Gabel is a Wellington-based political reporter. She joined the Herald in 2020 and has most recently focused on data journalism.