A capital gains tax already exists for people who play the sharemarket. If they are deemed to be share traders, then a capital gains tax applies, says Guy Elliffe, head of equities at AMP Capital Investors.

"I don't know if it will change investor behaviour dramatically," he said. "I don't think investors are suddenly going to demand a higher return from shares and that the sharemarket is going to fall 10 per cent."

Elliffe said the capital gains tax had a low probability of being implemented, and grandfathering provisions would mean that it would have a relatively low impact initially if one were introduced.

On the flip side, Elliffe said it was conceivable that a capital gains tax could have a favourable impact on the Government's fiscal position, which might cause interest rates to drop.

Market commentator Arthur Lim said New Zealand stood out compared with many other countries - such as Australia and the United States - in not having a capital gains tax.

"They make it on a receding scale, so the longer you keep the investments, the lower the tax that applies, so much of it comes down to the structure of the capital against tax," he said. "I do think that in New Zealand we need to steer investment more into the productive sector and this preoccupation with property is not healthy for the longer-term health of the economy."

But Shane Solly, head of equities at Mint Asset Management, said a new tax would increase the cost of capital.

"My issue is that if there is a capital gains tax of some sort, then all that does is crowd out investment," he said. "There is a cost. We are competing for capital on a global basis and the response from investors will not be positive.

"People will spend more time on finding ways to get around it, rather than being more productive. The true economic cost is that the cost of capital will go up for businesses."

Craig Elliffe, professor of tax law and policy at the University of Auckland, said Labour's plan represented an opportunity to properly debate whether there should be a capital gains tax.

"There are excellent logical reasons why it should be part of the total tax position.

"No one is sensibly keen on the idea of new taxes just for their own sake, but if you put it into a context of a total tax policy, then it makes almost extraordinary sense." Elliffe said.

"To the extent to which you have tax policies that are distortionary on the economic levers and contributors to society, how sensible is it to have property investment four or five times the size or the sharemarket producing no tax revenue."