What Is Tax Policy in New Zealand?

Tax policy refers to the rules, legislation and government decisions that determine how taxes are collected and how the tax system operates. In New Zealand, tax policy affects individuals, businesses, employers, investors and other taxpayers.

Inland Revenue (IRD) administers the country’s tax system and provides guidance on tax obligations. The Government develops tax policy through its revenue strategy, policy work programme, consultations and legislative processes.

New Zealand’s tax system includes several major areas:

• Personal income tax: Tax on individuals’ taxable income.
• Company tax: Tax on company profits.
• Goods and Services Tax (GST): Tax on most goods and services supplied in New Zealand.
• Pay As You Earn (PAYE): Tax deducted from employment income.
• Fringe Benefit Tax (FBT): Tax that may apply to certain non-cash benefits provided to employees.
• Investment and property taxation: Rules covering income, gains and specific transactions involving assets.

The Government’s tax policy work programme, published by Inland Revenue, provides information about policy priorities, consultations, announcements and proposed legislation. Visit the Inland Revenue Tax Policy website for official updates.

New Zealand Tax Policy in 2026: What Is Changing?

The 2026 tax policy environment includes both enacted government measures and proposals announced during the election campaign. Understanding the difference is important when making business and investment decisions.

1. Budget 2026 Tax Measures

Budget 2026, announced on 28 May 2026, included several tax measures aimed at simplifying compliance, supporting investment and maintaining the integrity of the tax system.

Key measures announced included:

• Research and Development Tax Incentive: Changes intended to improve the timing of tax credit payments and refine the treatment of qualifying internal software expenditure.
• Fringe Benefit Tax: Simplification of rules for private motor vehicle use, including removing the requirement for detailed logbooks under the announced changes.
• Shareholder loans: Changes addressing outstanding loans made by companies to shareholders where the company is liquidated or removed from the Companies Register.
• Foreign-owned banking groups: Updates to thin capitalisation settings to align with prudential requirements.
• Tax compliance: Additional funding for Inland Revenue debt compliance activities.

These measures were included in the Budget 2026 tax legislation. Businesses should review the detailed rules and commencement dates relevant to their circumstances rather than relying only on a summary.

Official source: Inland Revenue – Budget 2026 announced .

2. Tax Policy and the 2026 General Election

The 2026 general election is scheduled for 7 November. Political parties have announced different tax proposals, including changes to business investment incentives, personal income tax, company tax and the taxation of property and wealth.

The proposals below are summaries of announced party positions. They should not be interpreted as enacted tax law or as guaranteed future policy.

What Are the Main Political Parties Proposing on Tax?

The following overview highlights selected tax proposals announced ahead of the 2026 election. The scope, implementation details and funding arrangements may change through policy development, legislative processes and any coalition negotiations.

National Party

National has campaigned on a commitment not to introduce new taxes. The current Government’s tax programme has also included measures focused on investment incentives, tax simplification and compliance.

The Government’s Budget 2026 measures are separate from any future election commitments. Businesses should assess enacted changes using official legislation and Inland Revenue guidance.

Labour Party

Labour has proposed a 28% capital gains tax on gains from residential investment and commercial property, with the proposal applying to gains arising after 1 July 2027 under its announced policy. The family home, farms, shares, KiwiSaver, businesses and inheritances are among the stated exclusions.

Labour has also announced a Small Business Action Plan. Its proposed tax measures include increasing the immediate asset write-off threshold from $1,000 to $10,000 for eligible businesses with annual revenue below $10 million, and increasing the compulsory GST registration threshold from $60,000 to $80,000.

Labour has proposed funding its small-business package by replacing Investment Boost in its current form. These measures remain proposals and should not be treated as current entitlements.

Green Party

The Green Party has announced a broader tax package that includes proposals affecting personal income, wealth, inheritances and larger companies.

Selected proposals include:

• A proposed 2.5% annual tax on an individual’s net assets above $10 million, with a family-home exemption.
• A proposed Capital Acquisitions Tax on qualifying gifts and inheritances above $1 million, with stated exemptions.
• A proposed increase in the company tax rate from 28% to 33% for companies with annual turnover above $30 million.
• A proposed $10,000 personal income tax-free threshold and changes to personal income tax rates.
• Additional proposed measures affecting banks and certain offshore payments by large technology companies.

These are party policy proposals. Their final design, scope and implementation would depend on further policy and legislative steps.

Te Pāti Māori

Te Pāti Māori has announced proposals covering personal income tax, wealth, land and company taxation.

Selected proposals include:

• A proposed $30,000 personal income tax-free threshold.
• A targeted Kai Credit for people earning $60,000 or less.
• A proposed wealth tax with progressive rates.
• Proposals relating to land banking, vacant houses and stamp duty.
• A proposed increase in the company tax rate.

The detailed application and administrative design of these measures would need to be established if they progressed.

ACT New Zealand

ACT has announced a number of targeted tax-related measures rather than a single broad tax package. Announced proposals include changes to donation tax credits, a Local Tourism Dividend using existing revenue sources and changes relating to qualifying digital assets.

Businesses should review the specific policy documents before assuming that a proposal will change their tax treatment.

New Zealand First

New Zealand First has announced targeted proposals, including a reduced company tax rate for qualifying small and medium-sized businesses. The announced proposal refers to a 20% company tax rate for companies with turnover below $30 million.

The details and conditions of any such measure would need to be confirmed through final policy and legislation.

Opportunity

Opportunity has proposed a broader restructuring of the tax and transfer system. Its announced Tax Reset includes a proposed Citizen’s Income, a Land Value Tax and changes to personal income tax and KiwiSaver arrangements.

These proposals represent a wider reform approach and would require detailed implementation planning if progressed.

New Zealand Tax Policy Comparison: Key Areas to Watch

This is a high-level comparison, not a statement that any of these proposals has become law. For more detailed policy comparisons, refer to the published party policies and independent professional tax analysis.

How Could New Zealand Tax Policy Changes Affect Businesses?

Tax policy changes can affect more than the amount of tax a business pays. They can influence investment decisions, payroll costs, financial reporting, cash flow and the timing of major transactions.

1. Business Investment and Asset Purchases

Changes to depreciation rules, asset deductions and investment incentives can affect the after-tax cost of purchasing equipment, machinery, vehicles and commercial property.

Businesses considering significant asset purchases should understand the rules currently in force and assess proposed changes separately. Avoid delaying or bringing forward an investment solely because of an unconfirmed election proposal.

2. Property Ownership and Investment

Proposed changes to capital gains and property taxation may be relevant to businesses that own commercial premises or hold investment property.

Business owners should keep accurate acquisition records, improvement costs, ownership information and supporting documents. These records can help with future tax calculations and transaction planning.

3. Payroll and Employee Costs

Changes to personal income tax, PAYE settings or KiwiSaver arrangements may affect payroll administration and employee remuneration planning.

Employers should continue applying current payroll requirements until relevant changes are enacted and their commencement dates are confirmed.

4. GST and Business Cash Flow

GST registration thresholds and filing obligations can influence cash flow and administration, particularly for growing businesses. Labour’s proposed GST threshold increase is an election proposal, not a change businesses should apply without confirmation of enacted legislation.

Businesses should continue monitoring turnover and meeting their existing GST obligations.

5. Business Structures and Shareholder Planning

Changes to company tax, shareholder loans, trusts and investment taxation can influence how business owners structure transactions and manage distributions.

Before restructuring a business or transferring assets, seek advice based on current law and the specific transaction.

What Should New Zealand Businesses Do Now?

While election proposals may create uncertainty, businesses can take practical steps to remain prepared without making premature changes to their financial arrangements.

1. Review your current tax position: Check company tax, GST, PAYE, provisional tax and other obligations relevant to your business.
2. Keep financial records up to date: Maintain accurate records of income, expenses, assets, shareholder transactions and property costs.
3. Review planned investments: Understand how existing depreciation and investment incentive rules apply to proposed purchases.
4. Monitor official updates: Follow Inland Revenue announcements, tax legislation and commencement dates.
5. Assess policy proposals separately: Identify which proposed measures could affect your business, but do not treat campaign commitments as enacted law.
6. Discuss material decisions with an accountant: Obtain advice before major asset purchases, property sales, restructures or shareholder transactions.

Current Tax Law vs Proposed Tax Policy: Why the Difference Matters

One of the most important considerations when following New Zealand tax policy is understanding the difference between a proposal, a bill and an enacted law.

This distinction is particularly important during an election period. A proposed capital gains tax, wealth tax or change to a GST threshold does not change a taxpayer’s obligations simply because it has been announced.

Where Can You Find Official New Zealand Tax Policy Updates?

Businesses and individuals should use official sources to verify tax rules, legislative changes and compliance requirements.

• Inland Revenue Tax Policy – Government tax policy announcements, consultations and bills.
• Inland Revenue – Tax obligations, filing requirements, tax rates and guidance.
• Beehive – Government announcements and ministerial releases.
• New Zealand Parliament – Legislative information and the progress of bills.

Frequently Asked Questions About New Zealand Tax Policy

About DFK Orb360 O’Halloran

DFK Orb360 O’Halloran provides accounting, taxation and business advisory services to businesses in New Zealand. Our team supports business owners with financial reporting, tax compliance and informed financial decision-making.

Learn more about our firm and services at dfkorb360.co.nz .

Disclaimer: This article provides general information about New Zealand tax policy and announced proposals. It is not personalised tax, legal or financial advice. Tax legislation and policy settings may change. Confirm current requirements with Inland Revenue or seek advice from a qualified professional before making financial or tax decisions.