The NZ Property Market Podcast · Cotality NZ

Here comes the CGT?

October 28, 2025·38 min·3 clips

Labour proposes a 28% capital gains tax on property investments starting July 2027—how will it reshape New Zealand's housing market?

1. Nick Goodall and Calvin Davidson record for 28 October 2025, covering the CoreLogic chart pack and the Labour Party's surprise capital gains tax proposal announced that morning. 2. Nick Goodall is Head of Research and Calvin Davidson is Chief Economist at CoreLogic New Zealand, the data firm producing the housing statistics discussed throughout. 3. The episode's central question is whether Labour's CGT proposal is a genuine policy shift or an election-year political gesture unlikely to become law. 4. The October CoreLogic chart pack showed NZ residential property is now valued at $1.65 trillion, against $383 billion in mortgage debt, implying an aggregate LVR of 23% across the entire housing stock. 5. Calvin notes this aggregate LVR figure can be misleading — wealth and debt are unevenly distributed, and high interest rates are painful for debt holders even if overall leverage looks low. 6. The chart pack showed a continuing two-speed market: sales volumes in regional NZ are holding up better than in the six main centres, and Southland listings are 27-28% below the same time last year while Wellington and Canterbury have seen much smaller listing declines. 7. Calvin reports that more than half of first-time buyers are now using low-deposit LVR lending, and the Reserve Bank's upcoming LVR rule relaxation is expected to support more pre-approvals rather than directly lifting borrowing limits. 8. He explains that higher headroom under the new LVR rules lets banks pre-approve more high-LVR loans while remaining confident the low-LVR volume needed to satisfy 'speed limits' will also come through. 9. On inflation, Calvin notes the September CPI came in at 3.0% — the top of the Reserve Bank's 1-3% target band — but says the market has not panicked, as the Reserve Bank anticipated this and expects inflation to decline as spare economic capacity grows. 10. He previews an expected 0.25% OCR cut on 26 November, saying the question is whether it will be the last cut of the cycle, with third and fourth quarter GDP projections turning positive suggesting the economy is recovering. 11. Labour leader Chris Hipkins announced a capital gains tax proposal the day before recording: a 28% tax on net profits from residential investment and commercial property sales from 1 July 2027, with revenue ring-fenced to fund health policy. 12. The proposal explicitly excludes family homes, farms, business assets, shares, and KiwiSaver — making it a targeted rather than comprehensive CGT. 13. Nick raises the valuation question: starting values on 1 July 2027 could use rateable valuations that may be two years old, meaning taxpayers might be taxed on gains that occurred before the CGT's start date. 14. He also questions the revenue forecasts, noting that property owners may delay sales to avoid the tax, behavioral change could reduce turnover, and slower expected future price growth would reduce the tax base. 15. Calvin cites Australia and Canada as countries that have both CGTs and strong historical house price growth, concluding the tax reduces investor returns rather than preventing capital gains. 16. He presents a structural framework: NZ house prices rose historically due to falling interest rates, restricted land supply, and favorable tax treatment, and argues all three are now diminishing. 17. Both hosts note the CGT proposal may become moot if Labour does not win the 2026 election, and neither expects it to become the dominant election issue. 18. Nick draws a comparison to the existing bright-line test, noting it already functions as a limited CGT for short-term investors and that extending it indefinitely would be a simpler path than a standalone CGT. 19. The episode has a relaxed, analytical conversational tone between two economists processing a fast-breaking policy story, with both acknowledging they are working through the issues in real time. 20. Property investors, housing policy researchers, and NZ voters trying to understand the CGT proposal would benefit most from this episode; listeners wanting final policy analysis or tax legal advice will not find it here.

As heard by us

Measured property talk that turns tax, rates, and market data into usable context.

This piece keeps its focus on the capital gains tax proposal, then widens into a clear read on the New Zealand property market. Sales are still rising, listings have eased a little but remain relatively high, property values are mostly flat, first-time buyers are still strong,…

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You want the capital gains tax proposal and housing numbers without the noise.

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