Labour leader Chris Hipkins backs capital gains tax, says no further major levies coming
Chris Hipkins is standing by Labour’s proposed capital gains tax while saying there won’t be any more “significant” taxes on land, inheritance and wealth announced this election.
The Opposition leader also declined to say whether he would work with New Zealand First in a future coalition Government, instead saying: “If you’re voting for Winston Peters, who knows what you’re voting for?”
Hipkins joined Herald NOW’s Ryan Bridge this morning to discuss how Labour’s targeted capital gains tax (CGT) would affect everyday Kiwis.
After a record spike in property prices between 2020 and 2022, Hipkins said he wanted to see property prices stabilise and that the proposed tax is “one of the ways we can avoid going back” to unsustainable increases.
The tax on nominal gains from an investment property would be set at a rate of 28%. Bridge questioned whether this would hurt mum and dad investors’ retirement savings, but Hipkins noted it would only apply to gains made after the proposed valuation date of July 1, 2027.
“You’re still going to be making quite a lot of money off selling a residential rental property. What I’m saying to New Zealanders is we want you investing in other areas.
“It’s going to be better for all of us if we get more investment in the productive side of the economy, and we give first home buyers a chance to buy their own home, rather than having landlords competing with them to buy those homes.”
Hipkins said they took the advice of Australians not to set an introduction date for the CGT, which would have seen assets acquired prior to the date “grandfathered” or excluded from the rules.
“Instead, we went with a valuation date. It’s very clear, it’s very simple.”
Beyond the CGT, Hipkins pledged there would be no further taxes proposed before next year’s election.
“The regular sort of adjustments that Governments make, of course they will continue, but we’re not introducing significant new taxes.”
Talk of a potential Labour-New Zealand First reconciliation has also picked up steam after Winston Peters voiced his opposition to the Regulatory Standards Bill and vowed to have it repealed.
The Labour leader told Bridge that while many of Winston Peters’ views were “not compatible with the sort of unified approach that I want to bring to Government”, he wasn’t yet ready to rule out the party.
“Who knows whether Winston Peters will still be around at the next election? I mean, Shane Jones seems to be keen to take over New Zealand First,” he quipped.
As for third-term Labour MP Greg O’Connor, who is now weighing up his political career after his Ōhāriu electorate was abolished in the Representation Commission’s recent boundary changes, the future is also uncertain.
“Greg’s a really valuable member of our team, and I’d love to see him stay,” Hipkins said.
“Obviously, his seat’s disappeared from under him. And so now we’ve got to talk to him about how we can find other options for him.
“There’s still a Labour list selection process to do - he’s mulling whether he wants to put his name forward for that – so I’ll have a chat with him about that in the next couple of weeks.”
Tom Rose is an Auckland-based journalist who covers breaking news, specialising in lifestyle, entertainment and travel. He joined the Herald in 2023.
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