Capital gains tax in New Zealand

Does New Zealand have a capital gains tax?

New Zealand does not impose a general capital gains tax (CGT). This position makes it distinctive among OECD economies -- Australia, Canada, the United Kingdom, and Ireland all levy broad CGT regimes. The New Zealand government's Tax Working Group recommended a comprehensive CGT in 2019, but the then-Coalition Government rejected the proposal in April 2019, citing an absence of political consensus. Subsequent governments have maintained the no-CGT position, and there is no current legislative proposal to introduce one. As confirmed by Inland Revenue (IRD) and the PwC Worldwide Tax Summaries (last reviewed January 2026), New Zealand "lacks a comprehensive capital gains tax" -- though the tax code targets specific gain types as ordinary income.

What is the bright-line test?

The bright-line test is the most significant CGT-like rule in New Zealand. Under Section CB 6A of the Income Tax Act 2007, gains on residential property sold within a defined period of acquisition are treated as taxable income at the seller's marginal income-tax rate. For property sold on or after 1 July 2024, that period is 2 years, reduced from the prior 10-year period (which applied to property acquired between 27 March 2021 and 30 June 2024) and the earlier 5-year period (for acquisitions between 29 March 2018 and 26 March 2021). The start date is generally the title-transfer date; the end date is when a binding sale-and-purchase agreement is signed. A main-home exclusion applies where the property was the seller's principal residence throughout the bright-line period. Rollover relief is available for certain relationship-property settlements and deceased-estate distributions. IRD publishes guide IR1229, updated in March 2026, covering the current 2-year rules in detail.

When are property or share gains taxable as income?

Beyond the bright-line test, the Income Tax Act 2007 taxes gains on assets held on the "revenue account" -- meaning assets acquired with the dominant purpose of selling them. IRD's Interpretation Statement IS 24-10 (Income tax -- Share investments, 2024) sets out three tests courts apply: (1) whether shares were bought for the dominant purpose of disposal; (2) whether the activity constitutes a share-dealing business based on frequency, scale, and time committed; and (3) whether a profit-making scheme of share dealing was carried out. Long-term investors who buy shares for dividend income and long-term appreciation generally fall on the capital account side and realise no taxable gain on disposal. Active traders, those who turn over portfolios frequently, or those who can be shown to have bought with a resale intent at acquisition are taxed at marginal rates on disposal proceeds. The same Section CB 4 intent test applies to other personal property including cryptocurrency -- IRD's published guidance treats most crypto disposals as revenue-account events. Property developers, builders, and those associated with them face additional land-tainting rules under Sections CB 6 through CB 15 that can deem disposal gains as income regardless of holding period.

What are the FIF rules for offshore shares?

The Foreign Investment Fund (FIF) rules under Subpart EX of the Income Tax Act 2007 impose annual deemed income on New Zealand residents holding offshore portfolio investments. A FIF is broadly any offshore company, unit trust, or foreign superannuation scheme in which the investor holds less than a 10 percent interest. Individuals with a total cost of FIF interests below NZD 50,000 at any point during the tax year are exempt and do not need to calculate FIF income. Above that threshold, investors must calculate and return FIF income each year. The default method is the Fair Dividend Rate (FDR), which deems income at 5 percent of the opening market value of FIF interests at 1 April each year. Other methods include the Comparative Value method (taxing the actual change in portfolio value from year-start to year-end), the Cost method (where market value cannot be determined), and the Revenue Account Method (RAM) for eligible investors. Budget 2026 proposed raising the NZD 50,000 threshold to NZD 100,000 from 1 April 2026 and expanding RAM eligibility to all New Zealand tax residents for unlisted foreign shares, both subject to legislation. IRD guide IR461 (updated April 2026) contains the full FIF rules. A significant exemption covers direct shareholdings in companies listed on the Australian Securities Exchange and resident in Australia for tax purposes -- these are generally FIF-exempt for New Zealand residents.

New Zealand's income-tax rates for the 2025-26 tax year (from 1 April 2025) run from 10.5 percent on the first NZD 15,600 of income, 17.5 percent from NZD 15,601 to NZD 53,500, 30 percent from NZD 53,501 to NZD 78,100, 33 percent from NZD 78,101 to NZD 180,000, and 39 percent on income above NZD 180,000. Bright-line gains and FIF income are added to a taxpayer's other income and taxed at the applicable marginal rate -- there is no separate or discounted CGT rate.

For a broader picture of how New Zealand taxes residents, including the no-estate-tax and no-inheritance-tax positions, see the New Zealand country overview. Anyone facing a bright-line event, a potential revenue-account determination, or FIF obligations should consult a Chartered Accountant New Zealand (CA ANZ) member or a registered tax agent -- the rules involve statutory interpretation questions and fact-specific intent analysis that require a qualified professional.