Policy breakdown: Tax

We’re breaking down different parties' policies on some of the biggest issues in Aotearoa right now. Here's tax.

For summaries on other key topics, here’s cost of living and education.

These are condensed summaries, to make it as easy as possible for young voters to get key, relevant information. Parties may have more policies, or there may be more information or more policy detail beyond what we have been able to fit in here.

There are links to the full set of a party’s policies at the end of each section if you want more details or to see where it sits in their policy portfolio.

Parties are listed in order of the most recent 1News Verian poll, and there’s further info about our methodology at the bottom of this article.

Currently, New Zealand’s tax rates for individuals (aka for people, not businesses) are:

$0 to $14,000: 10.5%
$14,000 - $48,000: 17.5%
$48,000 - $70,000: 30%
$70,000 - $180,000: 33%
Over $180,000: 39%

Here’s what the parties are promising to do:

National: adjust tax brackets for inflation

The idea is: because wages have been going up, over time people might get pushed out of a lower tax bracket into a higher one, and because of inflation and the rising cost of living, people might be in a higher tax bracket but not necessarily be well-off.

So National wants to adjust tax brackets for inflation, to this:

$0 to $15.6k: 10.5%
$15.6k - $53.5k: 17.5%
$53.5k - $78.1k: 30%
$78.1k - $180k: 33%
Over $180k: 39%

They also want to expand tax credits, (a reduction in the amount of tax a person pays, for example by getting money back in their tax return), and increase things like Working for Families.

National says its tax plan will give the “squeezed middle” a tax relief. National leader Christopher Luxon says a family with children on the average household income of $120,000 would get up to $250 more a fortnight.

While a full-time minimum wage earner would get up to $20 more a fortnight.

How will it be paid for? National says the tax plan will cost $14.6 billion over four years, and they will pay for it in a number of ways, including:

Four tax changes:

End the current ban on foreign buyers for houses worth over $2 million, and taxing those buyers at 15%
Make offshore online gambling services pay tax
End the commercial building depreciation tax break
Increase the fees migrants pay for visas, except tourists

Other “reprioritisations and savings”, including:

Cut the Labour government’s recent initiative of free public transport for kids and half-price for young people
Reprioritise money raised by taxing climate polluters through the Emissions Trading Scheme: instead of going to help industries move away from fossil fuels, money would help pay for these tax cuts
Reduce government spending on consultants and back-office functions

Read more in the policy here, or article here

Labour: remove GST from fruit and vegetables, no capital gains tax or wealth tax

Labour’s key tax policy is removing GST from fresh and frozen fruit and vegetables, which it says will save the average household about $5 a week.

Boost the In-Work tax credit by $25 a week, and change Working for Families thresholds.

Labour is not proposing any tax cuts or changes to tax brackets, and says it will not introduce any new taxes either.

Leader Chris Hipkins has ruled out a capital gains tax or wealth tax if he is Prime Minister.

New Zealand currently does not have a capital gains tax, but in 2021 the Labour government extended the Bright-line test, meaning if you sell a residential property that’s not your main home within 10 years of buying it (or five years for new builds), you need to pay tax on the profit you make, and other political parties have labelled this a form of capital gains tax.

Read more about the GST and tax credit policy here, and about ruling out taxes in this article here.

Green: no tax on the first $10k of income, add a wealth tax and trust tax

An income guarantee: everyone, either working or not working, will have a weekly after-tax income of at least $385, $770 for a couple, or $735 for a single parent.

This means student support payments, and sickness and jobseeker benefits will be at least $385 a week.
It would increase in future in line with average wage increases.

Tax-free threshold on the first $10,000 of income, so no one pays any tax on the first $10,000 they earn.

(Currently, New Zealand does not have a tax-free threshold, so income at any level is taxed, with income up to $14,000 taxed at 10.5%. Australia, for example, does have a tax-free threshold, so nobody pays any tax on their first $18,200 AUD of income.)

The Green Party says a person working full-time on the minimum wage would have $18 more a week, and that everyone earning under $125,000 will benefit.

A new top income tax rate: income over $180,000 would be taxed at 45%. Currently it’s taxed at 39%.

A new 2.5% wealth tax: If an individual has assets (like properties or shares, minus mortgages and other debt) worth over $2 million, or a couple have assets worth over $4 million, those assets will have a 2.5% tax. The Green Party says this will affect the wealthiest 0.7% of New Zealanders, and most family homes will not be taxed.

A new 1.5% trust tax: So that people can’t avoid the wealth tax by moving their money into a trust.

Raise the company tax rate back to 33%, after it was lowered to 28% by the National government in 2008.

Replace the Working for Families tax credit system, and instead pay caregivers $215 a week for a first child, and $135 a week for other children.

The Green Party says this will see the “wealthiest 1% pay more tax” while giving a tax cut for people on low and middle incomes.

Read more in the policy document here, or this article here.

ACT: only three tax brackets, make top tax rate 33%

New Zealand currently has five tax brackets but ACT wants to reduce this to three. By 2026, they want the tax brackets to be:

$0 to $60,000: 17.5%
$60,000 to $180,000: 30%
Over $180,000: 33%

Because this raises the tax rate for people on low incomes (the current tax rate for income up to $14,000 is 10.5%, but ACT would raise it to 17.5%), ACT would introduce a new tax credit for people on low and middle incomes.

ACT says this “reduces the incentive for tax avoidance” and sends a message that if you work hard, you get to keep more of your money.

They say the average person will pay $1,236 less tax a year.

ACT also wants money raised by the Emissions Trading Scheme to be given to New Zealanders as a tax refund, instead of it going towards the Government’s Climate Emergency Response Fund.

Abolish the Bright-Line Test: currently, if you sell a residential property that’s not your main home within 10 years of buying it (or five years for new builds), you need to pay tax on the profit you make. ACT wants to get rid of this tax.

Read more in the policy document here, or this article here.

NZ First: no tax on the first $14,000 of income, adjust tax brackets for inflation

Tax-free threshold on the first $14,000 of income (the lowest tax bracket) by 2027.

The party says this will give workers $28 more a week.

Adjust tax brackets for inflation from April 2024, and update every three years.

Have a Select Committee Inquiry into whether GST should be taken off basic fresh food. NZ First says “We must examine if this would deliver real benefits for taxpayers before legislating for it,” and they want to make sure the savings get passed on to consumers.

Te Pāti Māori: no tax on the first $30k of income, add a wealth tax and empty house tax

No tax on any income earned up to $30,000, otherwise known as a tax-free threshold.

Te Pāti Māori says our tax system is “broken” and “has fuelled extreme wealth inequality that is only getting worse”.

Te Pāti Māori says more than two million New Zealanders (47%) earn less than $30,00 a year, and under their plan those people would get an extra $4270 a year.

The party says 1.8% of New Zealanders earn over $200,000.

From July 1 2024, Te Pāti Māori wants tax rates of:

0% on income of $30,000 or less
15% on income of $30,001 and up to $60,000
33% on income of $60,001 and up to $90,000
39% on income of $90,001 and up to $180,000
42% on income of $180,001 and $300,000
48% on income of $300,001 and above

The party also wants people receiving the benefit or superannuation to not be taxed (currently most benefits including superannuation have tax deducted before you receive them).

Additionally, Te Pāti Māori wants to:

Create a new wealth tax of 2% for net wealth (minus mortgages or debt) over $2 million, 4% for over $5 million and 8% for over $10 million.

It would be for individuals and the combined net wealth of couples, paid annually and including capital gains.
Te Pāti Māori says at these rates it would not affect most family homes or retirement savings, and would generate $23 billion a year

Remove GST off all food.

Raise the company tax rate back to 33%, after it was lowered to 28% by the National government in 2008.

Introduce a 2% foreign companies tax, that would apply to overseas-owned companies operating in New Zealand, like Facebook, Google, Amazon or Australian-owned banks.

Land Banking Tax on all land that hasn’t begun development four years after purchase. Taxed at 33% of the increase of the value of the land. With an exemption for Māori freehold and customary land.

Ghost house tax for unoccupied dwellings that don’t have a tenant after a six-month period. Taxed at 33% on the current market value of the property.

Invest $500 million into the Serious Fraud Office and Inland revenue to investigate tax evasion.

Read more in the policy document here, or this article here.

Notes on our methodology

How we chose the parties: We’ve included parties who currently have MPs in Parliament, (aka Labour, National, Greens, ACT and Te Pāti Māori) or parties which are likely to win one electorate seat or meet the 5% threshold to get into Parliament (aka NZ First), according to what recent polls are showing. Political parties need to get at least 5% of the party vote or win at least one electorate seat to get into Parliament.

These are condensed summaries: To make it as easy as possible for young voters to get key, relevant information. Parties may have more policies or there may be more information or more policy detail beyond what we have been able to fit in here.

These summaries were accurate as of the time of publication: But parties can release policies right up until the day before election day, so some parties may announce policies after we have published.

How will these policies be paid for? Where possible we’ve tried to include information about what the parties say these policies will cost and how they will be paid for, but not every announcement has that information.

Difference between election promises and government policy announcements:

Some of the things Labour has announced over the last few months are government policy announcements (where work can start on them as soon as they are announced), and some are election promises (where they only happen if that party gets elected). It all gets a bit confusing because both of these things can be referred to as policies, so where possible we’ve tried to indicate which is which.