Greens propose wealth, inheritance taxes to fund income tax changes

The Greens have unveiled their first major policy for this year's election, proposing a wealth tax on net assets above $10 million and income tax changes which it says will result in a tax cut for 96% of New Zealanders.

It's a scaled-back version of the plan it took to the last election.

The Greens' policy would tax net assets — including property, shares, and bonds — above $10 million at 2.5%, with the family home exempt.

Additionally, the party wanted to introduce a "capital acquisitions tax" — a revived inheritance tax — charging 33% on inheritances received worth over $1 million.

Small gifts, family homes and farms were exempt, and it would be the person receiving the inheritance or gift who would pay the tax — not the estate or the person passing it on — and it would apply to around 1100 people a year, according to the Greens.

Meanwhile, for wage and salary earners, the party wanted to create a new $10,000 tax-free threshold, while also adding a new higher tax rate on income made over $160,000.

According to the party's policy documents, around 96% of New Zealanders would pay less tax under the income tax proposal than they do today due to the tax-free threshold.

Party co-leader Marama Davidson said 99.7% would not pay the net wealth tax, which the Greens have branded as a "super-rich tax". The $10 million threshold for the tax is significantly higher than the one the Greens took to the last election.

Today's launch followed an early publication of the policy on the party's website hours before the announcement, which forced the Greens to bring forward its media event.

Davidson said it was "a human mistake", but she was "pretty rapt that people are out there talking about it".

The Greens claim their overall package would lift net government revenue by $5.35 billion in 2027/28, rising to $5.94 billion by 2030/31.

Party co-leader Chlöe Swarbrick said the Greens had narrowed its wealth tax or "super-rich tax" in response to voters wanting certainty about who would be affected.

"We have heard loud and clear from people that they want clarity as to who this will apply to, so with that $10 million threshold, I think it's pretty clear," she said.

She said the new and upped taxes were justified by a "cost of greed crisis".

"New Zealanders aren't stupid, they are watching the cost of their groceries, power bills, and the cost of living go through the roof, while corporates rake in record profits."

Swarbrick said the wealth tax policy could be implemented quickly, pointing to modelling done under the previous Labour government for a similar but later-scrapped scheme.

"The IRD and Treasury have done a heck of a lot of work on that $10 million threshold and proposed it to (former Labour ministers) Grant Robertson and David Parker," she said.

"We know that this is able to be picked up off the shelf right now."

A Greens-commissioned review from Infometrics suggests its costings "appear to be reasonable assessments", though conditional on the assumptions behind each policy.

The economic consultancy's principal economist, Brad Olsen, who carried out the review, cautioned that a large number of overlapping changes were"difficult to fully assess" and that behavioural shifts by those affected had not been fully modelled.

"Although there is uncertainty, the estimates produced are valid and reasonable."

Under the proposed system, the first $10,000 earned would be tax-free.

Workers would then pay 10% on income between $10,000 and $19,999, 17.5% between $20,000 and $39,999, 25.5% between $40,000 and $59,999, 30.5% between $60,000 and $79,999, and 33.5% between $80,000 and $159,999.

A new top rate of 45% would apply to income over $160,000.

Compared to the current system, the proposal taxes less of a person's lower income — the tax-free $10,000, versus the lowest dollar being taxed at 10.5% now — but adds a new top rate of 45% above $160,000, where it currently tops out at 39% over $180,000.

The Greens have also proposed returning the company tax rate to 33% for companies with annual turnover exceeding $30 million - including big supermarket chains, banks and energy companies — while keeping it at 28% for small and medium enterprises.

The corporate tax rate hike would impact about 0.7% of businesses.

The party also wanted to introduce a 0.06% bank levy on the four big banks, modelled on Australia's, and enforce a 5% withholding tax on big tech profits sent offshore.

Swarbrick said: "Right now, Facebook, Google, Amazon and other multinational corporations are being allowed to make billions out of New Zealanders and pay next to nothing in tax for it, while small, local businesses are chased by the IRD into liquidation.

"That’s not right, and the Green Party will fix it."

On enforcement, Swarbrick said IRD would be resourced to assess and collect new taxes — referring to previous modelling done by officials about how to enforce a wealth tax.

"They estimated that the IRD would need about $3 million per year in order to be able to appropriately evaluate these things and apply the tax.

"We've resourced the IRD around $100 million in this proposal, so we think that is more than adequately accounted for."

Asked whether the wealthy could rearrange their assets or relocate to avoid the tax, Swarbrick said the costings accounted for behavioural change and had been independently audited by Infometrics.

"In the same way that IRD and Treasury, in the past, have baked in accounting for that very behavioural change, if we want to call it that, we have as well," she said.

The Greens have also pledged to reverse the Government's moves to unwind the bright-line test and restore interest deductibility on residential investment properties. The bright-line test, which was currently two years, would be changed back to 10 years.

Profits on a property sale would be added to the seller's annual personal income and taxed at their marginal rate, and property investors would lose deductions reinstated.

This year's policy is a scaled-back version of the party's 2025 Green Budget — a full alternative Budget that used tax to fund a sweeping social programme.

That plan set the wealth tax threshold much lower, at 2.5% on net assets above $2 million — $4 million for couples, plus a 1.5% tax on assets in private trusts to curb avoidance. The company tax rate rose to 33% across the board, with no carve-out for smaller firms.

It also carried a private jet tax of $5000 per passenger on arrivals and departures, and doubled mining royalties from 2% to 4% of revenue

Today's policy launch from the Greens drew swift fire from across the coalition, with National's Christopher Luxon saying the plan would be "a wrecking ball" to the economy.

Speaking at a separate policy announcement, Luxon said he had seen only a high-level version of the Greens' plan but argued it would drive wealth out of the country.

"If you seriously think that wealth creators and wealth generators in this country are going to hang around in New Zealand on the back of that policy, that's quite something."

ACT leader David Seymour attacked the policy in a statement on Sunday, branding it a "Hunger Games" vision and an appeal to "tall poppy syndrome".

"Instead of creating the condition for even more wealth, the Green vision is taking from those who've succeeded already," Seymour said, adding that the plan had landed "at the exact time Australians are looking to New Zealand as a positive place to invest".

"It is a tax policy written by the dark underbelly of our culture, tall poppy syndrome."

He took particular aim at the inheritance tax.

"Most New Zealanders' greatest motivation in life is their children ... Now, Chlöe Swarbrick and Marama Davidson will be looming over the deathbed," he said.

"Not even death is sacred under the Greens plan."

National's campaign chairperson, Simeon Brown, said the Greens had answered a question of how Labour would fund its promises.

“Labour has been presented with a smorgasbord of new taxes to adopt including a wealth tax, death tax, inheritance tax, gift tax, a tax on renters, and a new 45% top tax rate that will see hundreds of thousands of hardworking Kiwis paying," he said.

“What the Greens are proposing is economic lunacy. Their tax proposals would be a wrecking ball for economic growth.

"They would discourage investment, drive away talent and capital, and make it harder for businesses to grow, create jobs and lift wages."