Labour’s proposed property tax and free doctor visits: what it could mean for property owners
After two years, Labour’s tax policies are emerging. The proposed capital gains tax is being presented as a way to fund three free doctor’s visits each year for every New Zealander — but the numbers and timing add up.
There are already subsidised and free visits for Community Services Card holders and for children under 14 — so the main benefit would go to wealthier adults, not those currently missing out on care.
The capital gains would only start from 1 July 2027, and real tax revenue would come years later, once significant gains had built up. That means the promised free visits would either have to be initially funded from somewhere else.
New Zealand is not a low-taxed country. We already pay more in total taxation than the developed-country average, and far more than Australia — even without a capital gains tax.
What Labour is proposing
If a Labour-led coalition Government is elected in 2026, it intends to introduce a targeted capital gains tax on profits made when selling:
Commercial property, and
Residential property (excluding the family home).
The tax would apply at a flat rate of 28% from 1 July 2027, regardless of the owner’s tax rate.
Labour says this will make the system “fairer” by taxing property profits like business income. It claims that nine out of ten New Zealanders won’t be affected, because the tax would not apply to:
Family homes
Farms
KiwiSaver
Shares
Business assets
Inheritances, gifts, or personal items such as cars, boats, art, or furniture
Every dollar raised is said to go into the health system to fund the free doctor visits through a new Medicard.
How it could affect our clients
1) Who would pay the new tax
If introduced, the 28% tax would apply regardless of who owns the property – whether it’s held personally, by a company, or by a trust. It would be payable on any profit made after 1 July 2027 when the property is sold.
And, like the bright-line test for residential property sales, there would be no workaround to avoid it if Labour becomes the Government.
2) Planning for long-term property ownership
For anyone wanting to retain property long-term for the benefit of future generations, it is worth reviewing whether that property is best owned by a multi-generational trust.
Good planning before the proposed start date in 2027 could make a real difference to long-term outcomes.
3) The Medicard and free GP visits
Labour’s plan includes issuing every New Zealander a Medicard — a physical card or an app — giving them three free doctor’s visits each year.
It would be linked to GP systems, available in multiple languages, and designed to work for both digital and non-digital users.
With some GP visits now costing close to $100, this could bring genuine savings for some families — though questions remain about how it would be funded when it starts.
What to do now
If you:
Own or manage commercial or investment residential property, or
Have trust or company structures that hold property —
now is the time to review your ownership and succession plans so you’re ready if these proposed changes become law.
The policy would only take effect if a Labour-led coalition Government is elected in 2026 — but being prepared now means no last-minute surprises later.
Next step
Contact Ross Holmes Virtual Lawyers Limited to review your estate plans if they need updating.
