Election 2026: House price growth forecasts slashed significantly - is Labour’s capital gains tax in danger?
The New Zealand Treasury has significantly lowered its house price growth forecasts, potentially threatening the revenue projections for the Labour Party's proposed capital gains tax. Labour officials maintain that their costings remain conservative and that the tax will still be viable despite the downgraded economic outlook.
Why it matters
This highlights the vulnerability of political fiscal policy to shifting economic data and the challenges of funding public health initiatives through property-based taxation.
Labour needs house values to increase at a certain rate to fund its promises. Photo / NZME
Treasury has slashed forecasts for house price growth in New Zealand as a result of higher interest rates, more supply and lower migration.
It could potentially create risks for the Labour Party, which needs values to rise in order for its proposed capital gains tax (CGT) to fund hundreds of millions of dollars worth of health policies.
Labour’s costings for its CGT are predicated on annual house price growth of 3% to generate the revenue it has allocated towards various health policies, like three free GP visits for every New Zealander.
The 3% forecast was considered a “conservative” estimate by Labour and based on modelling by Treasury last year, which expected higher house price growth than it is now.
Get smarter about the news
Sign up free for a feed built around what you actually care about, Dive Deeper research on any story, and the full text of every article.
Create free accountAlready have an account? Sign in