Summary
Labour's proposed capital gains tax, set at a flat rate of 28%, is poised to significantly impact property investors in New Zealand if implemented after the upcoming election. The tax would apply to profits made on the sale of residential and commercial properties, with notable exemptions for family homes, farms, and inherited properties. The legislation is expected to take effect from July 27, contingent on Labour's electoral success and subsequent passage of the bill.
The discussion highlights how the tax would affect potential profits from property sales. For instance, if an investor purchases a property for $700,000 and holds it for ten years with a projected 5% annual increase, the profit could reach approximately $440,000. However, under the new tax regime, the investor would owe around $123,000 in taxes, leaving them with $316,000, a significant reduction compared to the current scenario where they retain the full profit. The conversation also delves into potential deductions and the nuances of calculating taxable gains, emphasizing that the effective tax rate may be lower than the nominal 28% due to various allowable expenses.
Moreover, the tax could alter investment strategies, prompting some investors to consider acquiring more properties to offset the impact of the tax on their overall wealth goals. The hosts explore whether this shift might make yield properties more attractive compared to growth properties, given the tax implications on capital gains. They also discuss creative strategies for legally minimizing tax liabilities, such as intergenerational wealth transfers, which could encourage families to hold onto properties longer to avoid triggering capital gains taxes. As the political landscape evolves, the hosts express uncertainty about the future of the tax and its potential ramifications for the property market.
Show Notes
Labour wants a 28% tax on the profit when you sell an investment property. So we built a spreadsheet ... not to argue whether it’s fair, just to answer one question. If you buy a property, what does the bill actually look like? In this episode, Ed and Andrew run the numbers on a 28% CGT in plain English. You’ll learn: What actually happens if Labour’s capital gains tax comes in The bill you’d actually receive, and can you legally minimise it How it changes which property you buy The lesson? A CGT wouldn’t kill the maths, but it changes the game most for anyone planning to switch from growth to yield at retirement. Let us know your thoughts by leaving us a voice message on the Property Academy Hotline For more from Opes Partners: Stay ahead of the NZ property market Instagram TikTok
More from The Property Academy Podcast
I usually buy off-market, so I’d never really done the open-home circuit as an investor. So one afternoon I went to three in a row to see what actually happens. A messy layout, a big price drop, and a do-up the vendors wanted $1 million for. Here’s what I found. In this In The Field episode, Ed takes you along to three Auckland open homes and shows you how to read one like an investor. You’ll learn: The questions to always ask an agent What can go wrong when you invest in a townhouse What happened when Ed rang the agents back after the auction The takeaway? An open home isn’t about the staging. It’s about the questions you ask after you leave. Let us know your thoughts by leaving us a voice message on the Property Academy Hotline For more from Opes Partners: Stay ahead of the NZ property market Instagram TikTok
A woman had it all figured out: good income, mortgage-free, the trust paid off the house. So where’s the money she used to put on the mortgage going? “Honestly, we just spend it.” In this episode, Ed and Andrew explain why even high earners can’t find money to invest and the one fix that reliably works. You’ll learn: Why your money gets absorbed, not wasted The “commitment device” that forces you to save without willpower Why a mortgage top-up is temporary and what it can turn into The takeaway? The hardest part of investing isn’t the maths. It’s removing your own ability to change your mind. Let us know your thoughts by leaving us a voice message on the Property Academy Hotline For more from Opes Partners: Stay ahead of the NZ property market Instagram TikTok
Around 600,000 more people are set to call Auckland home... like half the South Island upping sticks and moving to the big smoke. So, where do we put them all, and what does that mean for where you buy? In this episode, Ed and Andrew map out the $50 billion of infrastructure reshaping the city, decade by decade.You'll learn: Why Auckland needs the equivalent of 100 new suburbs How new trains, motorways and busways lift house prices around them Which projects are near-certain, and which might never happen The lesson? Follow the roads and rail, but know the timing. The price boost tends to arrive a year or two before a project opens, not at the time of the announcement. Let us know your thoughts by leaving us a voice message on the Property Academy Hotline For more from Opes Partners: Stay ahead of the NZ property market Instagram TikTok
Remember 2022, when banks combed your statements and declined you for too many flat whites? That's over. So, what do banks actually check now, and what have they stopped caring about? In this episode, Ed and Andrew break down how banks really assess a mortgage application in 2027. You'll learn: Why banks no longer scrape your spending line by line Whether a messy few months will actually sink your application How credit cards, Afterpay, and the stress-test rate affect your borrowing The surprising takeaway? Most people are far more mortgage-ready than they think. Try out our Can I afford an investment property in 2026? calculator. Let us know your thoughts by leaving us a voice message on the Property Academy Hotline For more from Opes Partners: Stay ahead of the NZ property market Instagram TikTok
In 1962, the average Kiwi house cost about $7,000. By 2021, it was $895,000 – seven doublings.But not one of them took exactly ten years. So can prices really keep doubling as everyone says? In this episode, Ed and Andrew walk the whole 60-year ladder, then argue whether the pattern can continue. You'll learn: How long each of the seven doublings actually took The case for it continuing and against The number that surprised us, even measuring from the bottom of a downturn The lesson? Growth is the lever you control least. The two you do control: buy earlier, and buy more. Check out our NZ House Price doubling calculator for yourself. Let us know your thoughts by leaving us a voice message on the Property Academy Hotline For more from Opes Partners: Stay ahead of the NZ property market Instagram TikTok